THE RAPE OF SOCIAL SECURITY

Three years ago in 2013, I wrote a column entitled The Theft of Social Security. I have retitled the column to The Rape of Social Security. At the same time, updated the column where appropriate and added additional reflections.

My motivations in rerunning the column twofold.

First, I am sick and tired of hearing politicians continuing to cry for the cutting or privatization of Social Security. I am angered by their cries that Social Security is an entitlement increasing the national debt. They make it sound like the elderly are getting something for nothing.

Social Security is not an entitlement. Not one cent of U.S. monies has ever been spent making Social Security payments. Social Security payments come from the paychecks of working people over the course of their lifetimes, with a lesser contribution by the employer added on.

I honestly believe that many of our elected representatives do not even know this. They are unaware. They believe the garbage the American public has been fed over the years that Social Security is breaking the back of the economy.

Second, I am aggravated every time one from a younger generation tells me it is not his or her responsibility to support me in my old age. They are totally unaware of where Social Security payments come from and the theft of Social Security’s surplus funds by the government over the years.

All of which compels me to republish my 2013 column. With what I perceive as a stronger title, a more appropriate one: The Rape of Social Security.

October 2013

The U.S. Government has stolen significant monies from the Social Security Trust Fund. Legally, of course.

The theft of Social Security is not understood by many. Even elected officials whose business it is to understand a federal program as large as Social Security. Congressional persons have standard talking points which are not true. They erroneously represent to the American public that Social Security cannot support itself, that Social Security is broke, that Social Security benefits must be cut, etc.

These Congressional persons either know not that of which they speak, or are intentionally misrepresenting the facts.

You will find this column interesting. Guaranteed.

The United States is in debt to the tune of $18 trillion dollars. Who is the biggest creditor of the United States? To whom does the United States owe the most money?

If you believe China, you are wrong. The largest creditor of the United States, the entity the U.S. government owes the most money to, is Social Security. Specifically, its Trust Fund. $2.8 trillion dollars and going up each day. The second biggest creditor is China. The United States borrows money from China sometimes on a daily basis. The United States owes China $1.4 trillion. Japan is close behind at $1.1 trillion.

The United States owes Social Security more than twice what it owes China. And more than its combined debt obligation to China and Japan.

Surprising. Shocking.

Social Security is not broken. It has worked well for 81 years. The United States government is broken. Government has been grabbing money from Social Security for years, has never paid a cent back, and from what I can determine, has no plan to pay any money back. It has been made to appear that Social Security is a noose around the neck of the United States economy. The people have been told that Social Security benefits must be cut so the economy may survive. Bunk!

Examine the pertinent facts.

Social Security comes out of every American pay check. An employer contribution added to it. The Government pays not one penny of the monies deposited in the Social Security Trust Fund.

The amount a person pays into the Trust Fund over the course of a working life time is substantially more than the benefit derived. A worker pays into the Fund generally for 40-50 years. The monthly Social Security check received by the senior citizen is peanuts in comparison.

Except for 11 years, Social Security has in every year of its existence taken in more than it has paid out. There is always a surplus. Since 1984, Social Security has taken in more each year than it has paid out.

The monies Social Security pays out include Old Age Retirement Benefits (the monthly check), Temporary Assistance for Needy Families, Medicare, Medicaid, SCHIP, and SSI. All out of the Trust Fund. A surplus left over each year besides. Amazing! A terrific program Franklin Roosevelt put in place!

One problem exists. There should be a hell of a balance in the Social Security Trust Fund. Revenues annually are generally more than what is expended. There is no money in the Trust Fund, however. The Government has taken it all. Continues to do so.  And never pays a cent back.

The genius for the legal looting of Social Security had its beginnings minimally with President Lyndon Johnson.  President Ronald Reagan and his financial advisor Alan Greenspan  jumped in with both feet.  As did President William Clinton and House Speaker Newt Gingrich.

Bush 2 made no contribution to the formulation of the plan. He simply took advantage of a program already in place. By so doing, he financed significant tax cuts for the rich, paid for the Iraqi War, and funded the 2008 bank bailouts.

The plunder of the Social Security surplus funds had been legalized. The procedure simple. The United States government was allowed to “borrow” the surplus monies. In return, the United States would give the Trust Fund what were termed  “special service non-marketable U.S. Government  bonds.”

What are these bonds? Nothing. Non-marketable. They could not be used as collateral for a bank loan. No sane person would buy them. The bonds nothing more than IOUs.

Respectfully stated, good for use as outhouse toilet paper.

A scam

It was thought that if and when things turned adverse for Social Security, the government would redeem these bonds. In effect, pay back Social Security. After all, the commitment of the United States and Congress is to meet the country’s obligations.

The Government’s ability to pay depends on its power to tax and/or borrow. Congress reflects neither past nor present desire to pay. The Government refrains from even discussing these IOUs and their payment.

Where did all this surplus money go? How did certain Presidents and Congress spend the money?  In four areas.

First, to make up for the reduced taxes on the rich. Thank you Bush 2. Second, two unpaid wars. Thank you again Bush 2. Obama receives some credit also for not yet successfully ending the wars. Third, the 2008 bailout of the banks. Thank you Bush 2 and Obama. Finally, other government programs that needed to be funded and for which there might not be sufficient funding without invading the Social Security Trust Fund.

The process again simple. Surplus Trust funds are borrowed by the United States. An IOU is given to purportedly secure repayment. The money goes into the nation’s general fund to help pay for the tax cuts, wars, etc.

Certain economic experts have suggested a simple 30 year program to repay the IOUs would correct the problem and pay off the $2.8 trillion still growing debt.

The real problem is no one cares about paying back. It is the old story of borrowing from Peter to pay Paul. Except, Peter never gets paid back. The Government takes Social Security surpluses and spends them like a bunch of college kids out on a night on the town.

Social Security and Medicare should not be touched in any fashion. Other than to perhaps increase benefits.  Another plan would be for the government to stop immediately removing funds from the Trust Fund. The surpluses would build up rapidly.

This sad scenario makes one wonder whether the Government even cares about the 99 per cent. It appears to me that all our elected officials are concerned with are their images and friends. Not for anything or anyone else.

Make the rich richer and the poor poorer.

THE LOOTING OF SOCIAL SECURITY

I am sick and tired of hearing Social Security is broken, that it cannot sustain itself. Lies upon lies.

The American public is not being told the truth by its political leaders. Assuming they know or understand the facts. The media is silent, except to assist in spreading the fear of a broken system.

The first time I publicly heard an impropriety in the handling of Social Security was in the last Republican debate. Mike Huckabee asked in effect at one point…..What about the embezzlement of Social Security Trust funds? I may be incorrect as to the use of the word embezzlement. However, such was the thrust of his inquiry.

I have hit on the issue in the past. My TV show several years ago. A written article three years ago. Occasionally in my daily blog.

The national debt of the United States is the amount owed by the federal government of the United States. It consists of two parts; Intergovernmental debt and public debt.

Intergovernmental debt is monies the federal government has borrowed from the surplus funds of various U.S. agencies. Two hundred thirty agencies to be exact.

Treasury securities given in exchange for the surplus funds are non-marketable. They are in effect IOUs whereby the federal government promises to repay the monies borrowed including interest based on the “full faith and credit” of the United States. Useless collateral. It is nothing an agency can take to a bank and borrow on. It is even questionable whether an agency could sue in a court of law.

Public debt represents monies owed to foreign governments, investors, the Federal Reserve, state and local governments. U.S. Treasury bonds in most instances form the basis of the U.S.’s obligation. The debt can be pursued legally.

The present debt of the U.S. is $18 trillion. It is estimated that by the end of 2016, it will be $22 trillion. The intergovernmental portion of the debt totals $5.1 trillion. Social Security is owed $2.7 trillion of that amount.

$18 trillion is unfathomable. Hard to comprehend how much money it is. I came across two examples. If you were to take $1,000 bills and stack them one upon the other, the stack would be 65 miles tall before $1 trillion was reached.

Another way described is that a trillion dollars is enough money to buy every person in the United States, Canada and Mexico a new car.

The intergovernmental debt is just under 30 percent of the national debt.

It is the intergovernmental portion that is the subject matter of this article.

Here is how the federal government borrows the money. Most federal agencies finish the fiscal year with a balance. Can’t have that. The government immediately borrows the surplus. Never pays it back.

Since 1987, the federal government has borrowed $2.7 trillion from the Social Security Trust Funds. The money representing surplus/non used deposits. The federal government keeps borrowing and never pays it back.

Presidents and Congress then cry out how Social Security is breaking the back of the economy, is broken, cannot sustain itself, etc. What to do? Cut Social Security benefits, raise the eligibility age, eliminate Social Security, etc.

Not one penny has ever been paid back to Social Security since the taking began in 1987. Whores one and all who participate in this scheme that steals our dollars from Social Security.

The intergovernmental debt is in-house debt. It is like you and I invading our child’s college savings if the family has a cash flow problem. It is similar to a person borrowing from pension savings if crisis has befallen a home. It is the family’s money. If not paid back, so be it.

Although the federal government’s taking from Social Security is like family borrowing, it is not in a real sense. The U.S. may be my country. It is not my family.

Most of what I say concerning Social Security likewise applies to the 229 other agencies that the federal government borrows surplus monies from and never pays it back.

None of the 230 agencies has ever pursued the federal government for repayment. Nor would they. It would never occur. A fact of life.

Such being the case, the national debt in reality is not $18 trillion. It is as a practical matter $12-13 trillion. A large number, but one substantially less than the $18 trillion being bandied about. The accounting system used labels it a debt. A different system might not.

How did we get in this position? It starts with Ronald Reagan. Reagan told the people that if elected, he would cut taxes by 30 percent over 3 years. He claimed that in the end the cut would result in more revenue than before the rate cut. It did not work. Reagan had an embarrassing crisis on his hands. He did not want to admit his tax plan failed. He needed a new source of revenue.

The solution was to raise payroll taxes. The people were told it was to strengthen Social Security. A crock. Reagan wanted to use the surplus revenue generated thereby to show his tax plan worked. Taking the surplus funds was a subterfuge. The plan brilliant, however.

Reagan and his advisers were of the opinion that the money being borrowed would not be needed to make Social Security payments for 30 or more years. Let future Presidents worry about it.

The surplus funds borrowed went into the federal government’s general fund. Future administrations spent as desired. Primarily to pay for wars and further tax cuts. Bush 1, Clinton and Bush 2 continued to raid Social Security. Obama is no different.

Obama and Bush 2 raised the national debt big time.

In Obama’s six years, the debt grew $6.1 trillion. A 53 percent increase over what it was when he took office. Monies used primarily to save the economy from the 2008 mortgage crisis and to fund wars.

Bush 2 gave us the second largest increase. $5.8 trillion. Bush 2 doubled the debt in 8 years. He gave us a tax cut and a war.

One last misunderstanding requiring correction. We are told China is the largest creditor of the United States. Not true. China is owed $1.3 trillion. Social Security is the largest creditor. Owed $2.7 trillion.

What more can I say? Digest my words. Social Security is and has been solvent. Surplus most years. It is self sustainable. However, the federal government has been taking and must now start paying back. The fiddler has to be paid at some point.

Several economists have suggested that the government could pay back Social Security over a 30 year period without much difficulty. There has to be a will to do such before there can be a way. Recent administrations have had no such interest.

THE THEFT OF SOCIAL SECURITY

The U.S. Government has stolen significant monies from the Social Security Trust Fund. Legally, of course.

 

The theft of Social Security is not understood by many. Even elected officials whose business it is to understand  federal program as large as Social Security. Congress persons have standard talking points which are not true. They erroneously represent to the American public that Social Security cannot support itself, that Social Security is broke, that Social Security benefits must be cut, etc.

 

These Congress persons either know not that of which they speak, or are intentionally misrepresenting the facts.

 

You will find this column interesting. Guaranteed.

 

The United States is in debt to the tune of $17 trillion dollars. Who is the biggest creditor of the United States? To whom does the United States owe the most money?

 

If you believe China, you are wrong. The largest creditor of the United States, the entity the U.S. Government owes the most money to, is Social Security. Specifically, its Trust Fund. $2.7 trillion dollars and going up each day. The second biggest creditor is China. The United States borrows money from China sometimes on a daily basis. The United States owes China $1.3 trillion. Japan is close behind at $1.1 trillion.

 

The United States owes Social Security more than twice what it owes China. And more than its combined debt obligations to China and Japan.

 

Surprising. Shocking.

 

Social Security is not broken. It has worked well for 78 years. The United States government is broken. Government has been grabbing money from Social Security for years, has never paid a penny back, and from what I can determine, has no plan to pay any money back. It has been made to appear that Social Security is a noose around the neck of the United States economy. The people have been told that Social Security benefits must be cut so the economy may survive! What bunk!

 

Lets look at the pertinent facts.

 

Social Security comes out of every Americans pay check. An employer contribution added to it. The Government pays not one penny of the monies deposited in the Social Security Trust Fund.

 

The amount a person pays into the Trust Fund over the course of a working life time is substantially more than the benefit derived. A worker pays into the Fund generally for 40-50 years. The monthly Social Security check received by the senior citizen is peanuts in comparison.

 

Social Security has in every year of its existence taken in more than it has paid out. There is always a surplus.

 

The monies Social Security pays out include Old Age Retirement Benefits (the monthly check), Temporary Assistance for Needy Families, Medicare, Medicaid, SCHIP, and SSI. All out of the Trust Fund. A surplus left over each year besides. Amazing! A terrific program Franklin Roosevelt put in place!

 

One problem exists. There should be a hell of a balance in the Social Security Trust Fund. Revenues annually are more than what is expended. There is no money in the Trust Fund, however. The Government has taken it all. Continues to do so. And  never pays a penny back.

 

In the early 1990s, President Bill Clinton and Speaker Newt Gingrich needed to balance the budget. They came up with the genius plan to invade the Social Security Trust Fund. Most of the dollars represented surplus funds. Why leave all those dollars sitting around unused. 

 

Clinton and Gingrich decided they would "borrow" the surplus monies. In return, the United States would give the Trust Fund what were termed  "special service non-marketable U.S. Government  bonds."

 

What were these bonds? Nothing. They were non-marketable. They could not be used as collateral for a bank loan. No sane person would buy them. The bonds were nothing more than IOUs.

 

Good for use as toilet paper in an out house.

 

A scam.

 

It was thought that if and when things turned adverse for Social Security, the Government would redeem these bonds. In effect, pay back Social Security. After all, the commitment of the United States and Congress is to meet the country's obligations.

 

The Government's ability to pay depends on its power to tax and/or borrow. Congress reflects neither past nor present desire to pay. The Government refrains from even discussing these IOUs and their payment.

 

Where did all this surplus money go? How did certain Presidents and Congress spend the money. Basically, in three areas.

 

First, to make up for the reduced taxes on the rich. Thank you Bush 2. Second, two unpaid wars. Thank you again Bush 2. Obama receives some credit also for not yet successfully ending the wars. Finally, other government programs that needed to be funded and for which there might not be sufficient funding without invading the Social Security Trust Fund.

 

The process again is simple. Surplus Trust funds are borrowed by the United States. An IOU is given to purportedly secure repayment. The money goes into the nation's general fund to help pay for the tax cuts, wars, etc.

 

Certain economic experts have suggested a simple 30 year program to repay the IOUs would correct the problem and pay off the $2.7 trillion still growing debt.

 

The real problem is no one cares about paying back. The Government took our monies and spent it like a bunch of college guys out on a night on the town.

 

Social Security and Medicare should not be touched in any fashion. Other than to perhaps increase benefits. Another plan might be for the Government to stop immediately removing funds from the Trust Fund. The surpluses would build up rapidly.

 

This sad scenario makes one wonder whether the Government even cares about the 99 per cent. It appears to me that all our elected officials are concerned with are their images and friends. Not for anything or anyone else.

 

Make the rich richer and the poor poorer.

 

It seems to be working.