January 28, 2004

There are so many issues, opinions, and arguments surrounding Social Security that, coupled with misunderstandings, misinformation, disinformation, misdirection and deliberate propaganda, it’s no wonder the average American can’t see the forest for the trees. It all works to help the Beltway Bandits get away with robbing the system of hundreds of billions of the American worker's hard earned dollars.

Some of these arguments are valid and worthy of consideration, like the role of the Federal Reserve in our bond market and otherwise, but many of them are complete fantasy, like Social Security having any resemblance whatsoever to a Ponzi scheme. Others range from the philosophical and ideological to the downright ridiculous, but they all have one thing in common. They all get in the way of what should be done first to “save” or improve Social Security.

To date, the federal government has siphoned off almost $1.7 trillion in payroll tax payments and added interest that should have gone to the supplemental retirement system but instead was spent elsewhere. It has been used to support everything from wars to perks and pork barrel spending.

This amount is now represented by two trust funds that account for more than 22 percent of the national debt and that we normally refer to as “the Social Security trust fund.” And, because of the confusion surrounding Social Security, no one asks how in the world our supplemental retirement system became a part of the national debt. The most important question we should be forcing politicians and bureaucrats to answer in full.

This so-called “trust fund” has no resemblance to a real trust anyone might legally set-up in the private sector, it’s a trust fund in name only, it’s not a real trust, and it is absolutely worthless to everyone except the government that uses it to double tax American taxpayers, plus interest.

As long as this so-called trust fund exists, the American taxpayer will pay to redeem it some day. The federal government may pretend that it’s a debt that the government owes itself, but the government is a not-for-profit entity that has no money other than what it gets from taxpayers and not everyone in the United States is a taxpayer. When people who mean well try to tell you that your share of the debt is something like $25,000, they are only telling you a half truth. If you are a taxpayer, it's at least twice that amount.

This phony trust fund exists (as well as many others) because the government is running a scam that asks you to believe it’s possible to both spend and save the same money.

If members of the federal government were not “above the law” they would be prosecuted by their own Securities and Exchange Commission and probably in the slammer for misfeasance, malfeasance, misappropriation of dedicated funds, or whatever nicer words you want to assign to outright theft.

Any legal basis the pirates might put forward to justify what they’ve been doing is belied by the fact that they do the very same thing to more than twenty entitlements where the same excuses do not apply. These include their own Federal Employees Retirement System (FERS), Military Retirement, Unemployment money, Airports & Airways, gas taxes that are supposed to go to highways, and even retirement of their own Federal Judges. The entire “Intragovernmental Holdings” section of the national debt currently standing at more than $3.2 trillion is part of the scam. (See: Trust List)

STOP THE BLEEDING

There is no way we can recover the money that has already been stolen, but we can certainly force the government into not touching the excess revenue Social Security is producing today and will continue to produce from this point forward.

This surplus in payroll tax receipts for Social Security alone amounted to $71 billion last year, $82 billion the year before that, $89 billion three years ago, and a high of $98.7 billion the first year George W. Bush was in office, fiscal 2001. This is not chicken feed and it will grow to more than $100 billion per year once the economy and the job market improve.

The Beltway Bandits have themselves, out of guilt or whatever, tried to stop taking Social Security’s money when they spent years debating “lock-boxes.” Although lock-boxes, or any vault idea, might have provided them a graceful way to stop or get out of the scam, real trust funds are by their very nature already lock-boxes, so the attempt was doomed from the start. The fact that they even tried it proves their guilt and the fact that the Social Security trust fund is not real.

It’s going to take a huge effort on the part of the people of this country to bring this to a halt. And it is not something that lies anywhere in the future. The scam is happening right now, today, as you read this.

We could either cut payroll taxes or put the surplus in a real trust fund. Real trust funds cost very little to set up, certainly not the trillions in transitional costs the Bush administration is talking about. And even if the money just sits there or does nothing more than draw simple interest like a savings account, we will be more than 100 percent better off than we are now.

Once that much is accomplished, we will have plenty of time to debate the other issues plus how these billions might be invested.

Right now, we would be better off if the critics, who want to complain about Roosevelt ’s New Deal, argue that Social Security is welfare, socialism, or communism and that the Federal Reserve should be abolished, or any other esoteric subjects just kept their mouths shut and focus on the real issue – the rip off of surpluses. Otherwise, they’re just helping the government disguise its crime.

Although we have yet to see the plan, it’s hard to believe there is anything meaningful in President Bush’s “ownership” or “personal retirement accounts” plan for young workers as long as the government is continuing to daily steal Social Security’s money.

(Editor's Note: The only moral action is to dismantle social security - and all the rest of the scams - completely. Then each person can invest their earnings in any way they see fit. It's hard to see why so few people can understand what a tremendous boost that would be for both our economy and our liberty. Of course it's not going to happen. The "beltway bandits" have been at it too long and are not about to turn loose of the goose that lays the golden eggs until she is dead. They are working on that as we speak...)

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