AND WAITING FOR GODOT
By now, everyone should be aware of the nonpartisan rip-off our government has been pulling with trust funds and our payroll, gas, airline, health, unemployment, and a host of other taxes. It's no secret. It's right out in the open. And it's going to continue no matter which political party is in power. Why isn't it a major issue today? Why hasn't it been more of an issue in the past?
Forty-two percent of the national debt is absolutely fraudulent, represented by bogus trust funds that have no purpose other than to double tax us, plus interest, and to set up perks for the federal government.
Years ago, Jerry Heaster of the Kansas City Star put it well when he said: "Any government leader who discusses the Social Security trust fund as if it comprises real financial assets with marketable value isn't worthy of being taken seriously."
Today, we should be taking that idea one step further. Today, we should not give the slightest credence to any candidate for office who does not address this fraud head on.
The Social Security trust fund (actually two funds) is a major part of this fraud. There's no doubt about that. Currently standing at $1.5 trillion in debt markers, you can't miss its role. But the total scam involves almost $3 trillion, 42 percent of the national debt, and at least 22 other entitlement accounts that carry the bulk of this part of the debt.
The U.S. Treasury lists 159 trust funds, only 16 of which are real trusts. The rest are bogus. And the rest are all listed under the "Intragovernmental Holdings" portion of the national debt, a misnomer if there ever was one. (See: Trust Fund List)
And how did we get this debt? We bought it.
We bought it by giving the federal government more money than was needed to meet entitlement obligations. We bought it just as though we walked into the U.S. Treasury, plunked down a bundle of cash, and said: "Here, give me some debt."
The only thing that makes Treasury securities the safest investment in the world is that they are backed by every taxpayer in the nation. So why is our own money being used to give us more debt?
In a form of reverse alchemy, the government changes gold into lead by pretending to "borrow" surpluses. Then by further pretending that you can both spend and save the same money, the pirates place special obligation nonmarketable bonds in the respective debit black hole accounts that they call "trust funds." They even refer to these bonds as "IOUs" when they are really UOUs since only taxpayer money can redeem them. And to top it off, they pay the trusts annual interest by simply handing them more bonds, no money involved. I call it the "Pay-It-Again, Sam" scam.
If the entire Intragovernmental Holdings portion of the national debt were simply erased, liquidated, expunged with the stroke of a pen or delete key, the taxpaying public would be in exactly the same position we are in anyway. But the national debt would be greatly reduced and politicians would be forced to be honest, at least in regard to entitlements that make up the bulk (93 percent) of the debt falsely labeled Intragovernmental Holdings.
Instead of theft, fraud, and deception, politicians would have to cut programs or raise taxes, things the cowards are all deathly afraid to do now, even when necessary.
Let me explain
Financial experts have told us, and the Beltway Bandits themselves have confessed, that if the government must turn to these trust funds they will be faced with the "tough decision" to either (1) raise taxes (2) borrow substantial sums from investors on the honest side of the national debt (3) cut benefits or discretionary spending or any combination of these three factors.
What is less frequently recognized is that these are the normal elements of government finance and would be options whether there were trust funds or not. In other words, the trust funds do not seem to serve any purpose, are useless, and some pundits even claim that they don't exist, that the trusts are a fiction.
Unfortunately, these phony trust funds are of extreme value to our crafty Beltway Bandits. They're a fraud, not a fiction. Alan Greenspan succinctly summed up the government's position when he said: "The only thing that matters is that they (the bogus bonds) are enforceable."
With these trust fund holdings, the pirates can double bill us for taxes already paid and do so with hardly anyone noticing. Original taxes already paid that now have interest added for no other reason than to carry out the pretense of "borrowing" can be cashed in, providing even more loot through double taxation.
The scam has us both coming and going. First, when receipts are higher than outlays, they steal the excess/surplus and spend it—poof, it's gone. On the other hand, when receipts are less than outlays, they cash in some of the bonds they're holding and we pay again, we replace the same taxes we or someone else paid before, plus interest. They can do both within the same year, spending the excess elsewhere and charging us a second time when these bogus bonds are cashed-in or as Greenspan puts it "enforced."
Let's take a single example. Last year, fiscal 2003, American taxpayers paid at least $26 billion to cover unemployment and extended unemployment benefits—taxes that had previously been paid in excess by employers when times were better, but stolen and spent elsewhere. The Unemployment Trust Fund once held as much as $94 billion in bogus bonds. The government turned to this trust fund for withdrawals 10 months of last year.
![](http://www.uncle-scam.com/Breaking/feb-04/unempl-tr-03.gif")
Notice that in the month of April receipts were greater than outlays by $633 million. The Beltway Bandits added this excess money to their booty to spend elsewhere.
In May, the government paid interest against this trust fund's closing balance of $68 billion at the end of fiscal 2002 and it makes it difficult to tell how much was actually paid by employers during May. However, if we take the average interest of 4.598 percent handed trusts as interest, more nonmarketable bonds, and subtract that amount, we would have $6,634 million in receipts for May yielding a $1,845 million surplus. More loot.
Don't ask me why the totals do not always add up. I've tried to find out from the Treasury, but so far haven't received an answer. These figures are taken directly from Table #8 of the U.S. Treasury's Monthly Reports.
If, and that's a big "if," Social Security must ever turn to its trust fund what do you suppose is going to happen? We've been told by people at the highest levels, but we do not seem to want to believe it.
We've had plenty of booga-booga scare stories about Social Security's ultimate demise, most of these centering on propaganda about "76 million baby-boomers" cleverly presented but never stated as "births above normal" who are supposed to wreck havoc on the supplemental retirement system. Fortunately for the spinmeisters, this isn't going to happen until most of them have disappeared from the political scene.
The answer is obvious. Just as it's already happening with some of the smaller bogus accounts, we're going to be double taxed plus interest. The very same people who contributed extra money in the first place, the very same American workers who were overtaxed, are going to be forced to redeem their own money, plus interest. That's the way the scam works.
In our sour economy, you've heard that putting money in the pockets of consumers would stimulate the economy. But you've never heard that payroll taxes could be rolled back for American workers. At least, you haven't heard it from the Beltway Bandits. There is no way that the pirates are going to give up the goose that lays the golden slush fund.
Last year, fiscal 2003, the Beltway Bandits made off with $82 billion in surplus payroll taxes that were more than Social Security needed. The year before that it was $89 billion and in fiscal 2001 it was $98.7 billion when we had many more workers contributing. (See Chart)
In the year of our greatest surplus, fiscal 2000, the contribution from Social Security taxes was $94.5 billion as part of $149.8 billion from all entitlements together. And $87 billion came from income tax overcharges Bush later rescinded in part. They didn't tell you where this $237 billion surplus came from, did they? Now they claim that "surpluses are gone" when the major contributors are still there.
The other rational solution would be to put excess payroll tax payments in a real trust fund where wise and proper investment might grow Social Security into something more than supplemental retirement—where Social Security might actually become a worthy pension fund.
Don't go thinking that George W. Bush's imitating the Thrift Savings Plan with "personal accounts" and doing so only for low paid young people just entering the workforce is going to do anything but confuse things. It's another ruse, another pretense like "lock-boxes" that will have to be knocked down on its own inadequacies. If it were good for some, it would be good for all and it wouldn't cause inflation. We already have personal accounts from our IRS W-2 forms that the Social Security Administration uses to figure benefits. As it is, it just takes a little intragovernmental cooperation.