Posted on 05/02/2006 8:30:41 AM PDT by upchuck
[This is an excerpt from Nealz Nuze for today.]
The irresponsibility of the American people, their true heartfelt fear of freedom, and the exploitation of this fear by elected officials is bringing us closer to true financial disaster. You're complaining about gas prices today? In the not-to-distant future you'll have a lot more to complain about than gas prices.
Most Americans believe that there is something out there called a Social Security trust fund. They believe that when the government collects its Social Security taxes every year, it takes the money left over after paying all benefits and puts that money aside for future retirees. Americans actually believe this --- but they're wrong. The Social Security trust fund exists in name only. There is no money there. Not one single dollar. It's all gone. Decades ago, when Democrats were running the congressional show, someone came up with the bright idea of taking all of the Social Security taxes that were left over after benefits were paid and use that money to fund some other federal vote-buying social programs. The idea was simple. The free-spending congress would just give an IOU to the Social Security administration for the money that was pilfered and spent.
Those IOUs now sit in a grey filing cabinet in some federal office in West Virginia. There's your precious Social Security trust fund. Paper. IOUs from a government that doesn't have the money to pay them.
So how is it that Grandma gets her check every month? Social Security is what they call a Ponzi Scheme. If you or I set one of these up, we would be carted off to jail...which happens from time to time, by the way. In a Ponzi Scheme, earlier investors are paid off with later ones, but there's no actual money being invested. Sort of like paying your Visa with your Mastercard....for 40 years.
So right now, some schlub is working at your local burger joint to pay for some retiree's check. What is going to happen over time, is the amount paid out will be greater than the amount coming in...and the payout scheme will collapse, since there won't be enough to pay.
In just about 11 years, in 2017, we won't be collecting enough in Social Security taxes to pay the benefits that will be due to baby boom retirees. In other words, It will be time to head to that filing cabinet in West Virginia, take some of the IOUs out, and present them to the U.S. Treasury for redemption. But how do you pay off those IOUs when you're already spending every single penny you make? Well ... there's only a few possibilities. You borrow the money and go deeper in debt; you raise taxes on the already tax-oppressed Americans to get the needed funds, or you simply default on the IOU. You could, of course, cut spending in other areas to come up with the money --- but remember who we're talking about here. Even for a congress that has doubled federal spending over the past decade or so, cutting spending even by one single dollar is simply not an option.
Privatization? Yeah ... that would have been a partial solution. It would have delayed the financial collapse of Social Security, but private retirement accounts don't serve the purposes of politicians --- especially Democrats. How, after all, can Democrats threaten you with the loss of a retirement account that you own in order to frighten you into voting for Democrats? In every single congressional election since 1960 Democrats have warned voters that if they vote for Republicans the evil Republicans will either reduce or take away their Social Security benefits. And in every single congressional election since 1960 that argument has worked as thousands of frightened and uninformed wizened citizens rush to the polls to reelect their Democrat protectors.
Another problem with the idea of privatization is that Americans only have a very superficial love of freedom. The less freedom demands personal responsibility the more people love it. The more freedom demands self-discipline the less freedom is revered. Personal accounts -- private accounts -- would mean that people would actually have to be responsible for investing their funds and, to some extent, managing those investments.
That's just a bit too much freedom for many.
So -- the crisis looms. Politics rule.
By the way ... and this has to be said. One way to forestall -- not prevent, but forestall --- the crisis in funding Social Security and Medicare is to enact the FairTax. Right now people who no longer pay income taxes because they no longer have taxable income don't contribute to the Social Security pool. Enact the FairTax and these people are suddenly funding Social Security with every purchase they make ... past the poverty level, that is. Ditto for foreign visitors, legal and illegal, to our country. Just a thought.
That's our family plan in a nutshell.
With 30% Federal taxes on sales plus state sales taxes the drug dealers will make more money in black markets. No need to fear the IRS -- Boortz abolished it -- and state tax enforcement can't compete with the mob.
Al Gore says that's a risky scheme, and who are you to argue with such a distinguished author? He's a 'Rat politician and therefore much more qualified to make your decisions than you are. Just ask the people in his home state of Tennessee, who by their decisive vote in the 2000 Presidential Election made it clear exactly who did NOT deserve to be President.
Imagine a system modelled after Euro style "single payer health care" (now there's a euphemism) but instead of being for universal healthcare, it is scoped to deal with any and all aspects of elder care. And like a national healthcare system, only the wealthiest would have any reasonable alternatives other than leaving the country. I cannot discount the possibility that even such exceptions might be made illegal. The voters really are that stupid. Just wait. About 10 years from now, the Left will be calling for what I just laid out, in order to "contain costs and keep Social Security solvent."
No, they will solve it the same way they did in 1983 when SS went into a deficit. They raised the retirement age to 67, increased taxes, indexed the cap, and forced federal workers to join the system. This time around they will again raise the retirement age for full benefits, decrease the benefits for early retirement at 62 and/or raise the age, revise the formula to compute the annual COLA, and change the way benefits are computed further weighting it towards the lower end of the salary scale. They will also tax all SS. Both parties and the President will triumphantly declare that SS is now fixed and will be solvent forever, just like 20 years ago.
My point is that there is no debt that has been incurred.
Yes there has. The government told people that they were taking money from them for this scam called SS. They would receive benefits in return. Uncle Sam may have spent it on everything else but the lie it told was that the money would be there.
Now, if the government were to say that in 25 years the program will be gone but the tazes will be phased out in that time then there's no real issue. Can you imaging the stock market boom that would occur if everyone out there started investing an extra $3,000 or more a year in the market? Can you imagine the capital that companies could raise to expand? How about the 7.65% tax cut that businesses would get on their payrolls? That would boost earnings and stock value...
and I just woke up from my daydream.
That's a very pleasant daydream!
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