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02/11/12
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March 09, 2005 NATIONAL DEBT Since his inauguration Bush has increased the national debt $2 trillion. Of the $86 billion increase last month, almost $80 billion was borrowed from foreign nations. Several of these same nations are warning us to get our act together and threatening to come off the dollar that’s falling in value. They could cash-in their treasuries anytime. Last year, fiscal 2004, the United States of America borrowed 80 percent of the world’s savings. Who’s the welfare recipient? We will not know how much was stolen from Social Security in February until the Treasury’s Monthly Statement comes out in a week or so, but you can be assured that it will be close to the $16 billion taken in January unless jobs increased. Obviously, many of the other twenty-two entitlement black holes are being drawn down; i.e., taking money from the general fund and/or using borrowed cash as will happen to the Social Security trusts someday. They don’t hold any viable assets (See statements). The second largest account, the Federal Employees Retirement System (FERS) trust was in the red eleven out of twelve months in fiscal 2004 and is so far continuing the trend every month of fiscal 2005. Federal employees don’t mind as long as their retirement benefits are backed by taxpayers. In other words, money is coming from the general fund and you are presently paying to replace the cash federal employees paid into their retirement system but was “borrowed” by Congress and the administration. November 19, 2004 , just four months ago, the national debt limit was raised $800 billion to a new $8.184 trillion ceiling. Bush and his gang have already gone through $329 billion of that. At this rate, we will definitely need to raise the limit again before the end of the year. Bush is desperate for money. Not only is he planning a $2.57 trillion budget when receipts for last year were $1.87 trillion, but he needs it to carry on his occupation in Iraq . I think we’re already overextended in the Middle East so I doubt we’ll invade Iran. We’ll get Israel to do it. PAYROLL TAXES In the 70 years that the supplemental retirement insurance program has existed, payroll taxes have been raised 49 times. On this basis alone there’s something drastically wrong with Bush’s promise not to raise them again. Disability Insurance was added in the fifties and Medicare was added in the sixties. Their life span is therefore a little shorter than the retirement program that started in 1937 two years after the Social Security Act was passed in 1935. It took the Supreme Court two years to debate and finally decide (by a 5-to-4 vote) that the not-for-profit government could constitutionally tax American workers as long as it was promoted as a welfare system, a condition that has never been adhered to. These taxes normally have three variables: (1) the percentage of employee pay and the match from employers (2) the percentage of self employed earnings which didn’t begin until 1951 and was not always the same as the combined employee/employer tax and (3) the maximum earnings taxed annually or what has become popularly know as the “cap” on payroll taxes. See the attached history of payroll taxes (1937 to 2005) where every line represents a raise in terms of one or more of these variables. In 1983, and thanks mostly to Senators Daniel Patrick Moynihan and Robert Dole, the tax was raised over a seven year period to the present 15.3 rate on Employee/Employer and Self Employed rates. The cap, however, has been raised many times. Bush has already raised this cap five times from $80,400 in 2001 to $90,000 in 2005. The 1983 bill was passed by Congress and signed by President Reagan in less than a month. It also introduced a new variable by changing the age of full retirement from 65 to 67 years of age. A new variable that would start on January 2, 2003 and add two months to the older 65 requirement, that had been a standard for 68 years, and continue to do the same each year until 2009 when it would hold at 66 for twelve years before continuing to add two months every year until reaching 67 years of age for full retirement on January 2, 2027. Extending the age of full retirement is justified by the fact that more people are living longer but, of course, it’s also a method of increasing the market by keeping people contributing payroll taxes for a longer period. In short, Social Security is now the greatest implied contract in the world. It was originally sold to the public as an insurance program; it operates just like any private sector insurance company paying benefits from premiums derived from new and long term younger policy holders; and it makes adjustments to its rates based on actuarial data dealing with changing conditions. Witness the fact that it’s still called Federal Old Age & Survivors Insurance and Federal Disability Insurance to this day. Social Security is the greatest Implied Contract that ever existed. Some call it a “Social Contract” but they’re usually trying to soften or avoid the legal implications of an implied contract. When both parties agree to terms and it can be demonstrated that these terms continued over time this form of contract is just as binding as a signed and witnessed contract. In 1937, after debating for two years, the Supreme Court decided (by a 5-to-4 vote) that it was constitutionally valid for the not-for-profit government to tax workers for a supplemental retirement program – as long as the Roosevelt administration did not sell it to the public as an “insurance” program. The court wanted it called welfare (to fare well). This was before heavy welfare programs that followed in the sixties. The Roosevelt administration and politicians of the day agreed to do this but didn’t. Even though the Great Depression was still in full swing and thousands were destitute, they felt that the pride of American workers would never accept the idea of being on any sort of dole. Those out of work didn’t even want their friends to know they were going to soup kitchens and standing in bread lines. Practically no one had sufficient savings to outlast a serious ten year depression – which is much the same position most people are in today. The result was that in 1937 the politicians went right back to calling it “insurance” and sold it through on that basis just as the original 1935 Social Security Act had described it as a guarantee that no American worker would be without minimum subsistence in his or her golden years. To this day, Social Security is still called an insurance program fulfilling both sides of the implied contract and regardless of what the Supreme Court said off the record. You will not find it in cases like Helvering v Lester or the original Supreme Court decision. Witness the names of the trust funds cited above. Besides, the judge’s warning was just a ploy. They knew that the government was not supposed to compete with businesses in the private sector. Today’s critics would be much better off arguing the conflict of interest of a not-for-profit publicly supported organization engaging in private enterprise. They don’t call it “private” for nothing. Except for forced premiums and no need for salesmen, the Social Security Administration functions exactly like any private enterprise insurance company that calculates rates on actuarial estimates of life expectancy, environmental statistics, and so forth. They pay benefits from the new and existing premiums of policy holders whose names are recorded on IRS-W2 forms every employer submits annually (establishing “personal accounts”) and whatever is left over after benefits are paid is profit. Unfortunately,
Social Security’s enormous profits/overcharges do not go into a working
emergency reserve or property that can be liquid. Instead, the “surpluses”
are stolen by the government and spent elsewhere under the pretence of
having “borrowed” and “invested” them in securities
only the public can redeem. This is what’s properly called malappropriation
and double taxation plus interest. It’s simply not possible to both
spend and save or invest the same money. Try it. Visit Ed Henry's own web site! Send a message to your elected representatives. Click here to start. Be sure to send a copy to Ed Henry.
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Borrow-holics Setting Records- Time For Honesty About Social Security Stop The Bleeding For Real Social Security Reform- Social Security Trust Already In Trouble The Real Crisis Of Social Security Comouflage Surrounding Social Security Boomer Myth - The Great Fear Story For Social Security First Things First - STOP Social Security's Bleeding Secrets Neither Political Cult Will Tell You Complete Archives for Ed Henry | ||||||||||||||
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