April 14, 2005
Mr. Sweeney goes on to say that For decades workers have paid in more to Social Security than has been needed to pay benefits$67 billion more in 2004 alonein order to partially pre-fund future benefits by accumulating surplus assets in the form of U.S. Treasuries. To suggest now that workers have been had and that there is no trust fund to pay the benefits they paid for is an extraordinary betrayal. A default on the trust fund-held bonds would represent a $1.1 trillion transfer from low and middle income households to the richest 5 percent according to the Center for Economic and Policy Research.
The article ends with the salutation Shame on you, Mr. President.
Wake up Mr. Sweeney.
This is not the extraordinary betrayal you would like the rank-and-file to believe it is. In 2000, then President William Jefferson Clinton said much the same thing and many other authorities in a position to know have followed or preceded in less public announcements.
In the summer of 2001, before 9/11 put the subject to rest, a media frenzy ensued from then Secretary of the Treasury Paul ONeills brief and public comment that there were no viable assets in the Social Security trust fund, that he had no bags of cash buried in his backyard.
The Libertarian think tank, the CATO Institute, hailed the Secretarys comments as A politician finally telling the truth. And televisions talking heads like Neil Cavuto of the Comedy News Network (CNN) made jokes about the trust, never drawing the obvious conclusion that Americas workers were had in a system deliberately constructed to double tax them anytime the Social Security Administration found it necessary to turn to this so-called trust for funding.
Dozens of economists told us flatly and repeatedly that if Social Security ever resorts to its trust for funding, the poor dears in Washington will be forced to either (1) raise taxes (2) borrow enormous sums legitimately (3) rob Peter to pay Paul by taking money from the discretionary budget or cutting benefits or any combination thereof. The implications of this didn't sink in either.
Think about that because these are the normal fund raising factors of revenue and money management at any time for a not-for-profit pay-as-you-go budget-to-budget government that must bring its books to a zero balance by the end of the fiscal year. It means they have the same options they would have even if there were no trust fund; i.e., the so-called trust is a meaningless fiction useful only to the government in order to get money a second time plus interest and without proper legislation.
In the heart of the controversy, Alan Greenspan said; The only thing that matters is that the trusts holdings are enforceable. In other words, stick that in your pipe and smoke it.
Barring another horrific event, the current push to somehow put personal accounts into the supplemental retirement system is bringing up the same issues and is liable to unravel the greatest economic scam any government has ever pulled on its own citizens, at least since the Sheriff of Nottingham or any other dictatorship that simple took workers sweat equity and told them to eat cake. It involves a lot more than Social Security and, in fact, applies to the entire Intragovernmental Holdings portion of the national debt currently standing at $3.2 trillion and just as much a misnomer as the trust funds it holds.
Obviously, you and your very capable staff are taking cues from the Center for Economic and Policy Research instead of going directly to the bank or official sources like the U.S. Treasury. Taking direction from an academic think tank supporting the establishment can be a dangerously misleading source for facts.
For instance, on Wednesday, April 6th, CEPR came out with an article titled Mr. President, This is How the 21st Century Economy Works where, in the second paragraph, they claim that the Social Security trust fund stands at $1.8 trillion." This figure is off by almost $100 billion and is enough to discredit just about everything else they have to say. The Treasury reports that as of February 28th the Social Security trust stands at $1.703 trillion.
Can you simply write this off as a typo coming from a renowned research organization or whats a hundred billion here or there? Even the surplus of $67 billion for 2004 that they report is off by several billion, probably from using the wrong interest rate paid against the previous years closing balance. It gets worse. Rounded off, the Social Security trust funds increased $151 billion in 2004. $71 billion was surplus from America's workers. $80 billion was interest simply added to the account at no cost to the government.
If you go to Dean Bakers March 9, 2005 , article titled Default on the Social Security Trust Fund you will find overly complicated comparisons between the honest and dishonest side of the national debt. And, if you substitute we the people every time you find the word government you will come away with an entirely different perspective than the one intended.
No one is talking about default. Whats already happening is just the opposite. The buckaneers are already using these fictitious markers to double tax the taxpaying public. Take a look at the Unemployment trust fund which has gone from almost $92 billion in June of 2001 to its current $42.5 billion at the end of February 2005 for instance. No one but taxpayers can redeem any part of the national debt.
Today, the Social Security trust fund stands at more than 22 percent of the national debt. And no one is thoroughly explaining how surpluses were transformed into debt that the same taxpayers will be forced to redeem. The members of your rank and file are already redeeming some of the debt markers held by the Unemployment trust fund, the Federal Employees Retirement trust, Military Retirement, Veterans Insurance, and several other trusts in the same boat as Social Security.
To argue that the wealthy pay most in income taxes and are therefore covering most of this double taxation is to ignore the fact that the pains the same no matter how much wealth youve accumulated. One dollar taken from a homeless person or hundreds taken from workers can be as devastating as thousands coughed up by the rich.
We expect the head of the nations largest unions to not only understand this but to side with his membership against a government that's robbing them.
It is highly
recommended that you read our recent "Open
Letter to Bush and Congress."