January 16, 2006

Can you believe it? The Secretary of the Treasury, the one man in Washington who should know better, is claiming that unless the national debt limit is raised quickly there will be dire consequences for many discretionary budget programs including Social Security. The implication is that the retired and disabled will not get checks after mid-March unless the debt ceiling is raised soon.

This is the same man who allowed the debt to be run up $238 billion in the first three months of the new fiscal year and last year funneled $86.5 billion of Social Security’s money to Congress to be wasted.

He’s frightening members of Congress with this news. There, he’s talking to the same people who can’t pass a budget and are expecting to spend about a half trillion more than they can sanely expect in tax receipts. What will Congress do if the Secretary can’t borrow from China and Japan , our former enemies and WalMart with an army? These are the same nations that already hold us economically by the shorthairs.

The only way Social Security had anything at all to do with this fiscal crisis is through the government’s “lump and dump” program.

After stealing and spending monthly surplus payments, the government dumps “special” bonds in the trust fund pretending that they merely “borrowed” the money without permission from the lenders and without a contract, of course. This raises the national debt so that we can pay the same taxes again in a system of double taxation.

Then they do the most heinous thing of all. In order to continue with the fantasy that they merely “borrowed” the money, they add annual interest to the bill. They dump even more of these bogus nonmarketable bonds in the account, raising the debt even more. And they lump this into two payments, one in December and the other in June of each year.

In December of 2005, this interest totaled approximately $70 billion; $46 billion to the Social Security trust; $16 billion to the Federal Employees Retirement System (FERS) trust; and the balance to the Medicare account. This will be repeated in June.

Last year the Social Security trust fund went up $173.2 billion, $86.5 billion from surplus money spent elsewhere and $86.7 billion from interest. The trust ended the year with a grand total of $1.809 trillion in “special” bonds that will someday be redeemed by taxpayers as is happening today with other trusts.

The interest that will be added this year, fiscal 2006, will be about $92 billion and the trustees will alter their estimate of how long the trust fund will sustain the supplemental retirement system because of these “growth” factors. It's a self-perpetuating fraud that would continue even if the government stopped stealing retirement money.

It costs the government nothing to add this interest to the tab. All they do is credit the account with more bogus bonds – electronic entries on the books and backup paper in a secretary’s file cabinet in Parkersburg, West Virginia, the home of the Treasury’s Bureau of PUBLIC Debt.

It was their decision to add this indebtedness in December and June. They could have done it monthly or daily like legally contracted loans from China . Or better yet, they could have pretended these were no-interest loans just as easily as they pretend that they aren’t stealing the money.

The truth is that month after month Social Security’s payroll taxes will continue to produce more money than the supplemental retirement insurance program needs in order to pay benefits. And the government will continue to steal that surplus to spend elsewhere as “off budget” revenue, piling up more and more debt in the form of future taxes.

We would all be better off if the government simply took this surplus money and ran – dropped the fiction of having borrowed it – and at least had the integrity of crooks who rob banks at the point of a gun. That way we wouldn’t have to pay the same taxes again, plus interest.

So where does John Snow get off telling people that Social Security, the cash cow for government booty, is going to be jeopardized if the national debt limit isn’t raised? It’s nothing more than another scare story. Unfortunately, it usually works for them.

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