Posted on 02/25/2011 7:44:47 AM PST by Slyscribe
It is well known, if not universally acknowledged, that the Social Security Trust Fund doesn’t hold any assets of value to offset the government’s cost of benefits.
Every dollar’s worth of special-issue Treasury bonds held by Social Security — and there are currently about $2.6 trillion worth — is a dollar that Treasury must come up with by issuing new debt, raising taxes or taking away from the rest of government, which is in far worse fiscal shape.
(Excerpt) Read more at blogs.investors.com ...
And “government-issued bonds” aren’t worth the paper their printed on.
The biggest lie of all has been told for too long by both parties. The original Social Security scam was nothing more than a government (D) scheme to steal money from the public. If Social Security had honestly created a trust fund while the baby boomer generation was at work we'd have trillions that would last forever.
Instead they squandered the money for programs, buildings and bridges with their names on them.
The following is from The Heritage Foundation:
As political leaders debate how best to fix Social Security, many policymakers are focusing on the wrong issue. Their sole concern seems to be the date when the Social Security retirement and survivors trust fund will run out of its paper assets. This mistaken emphasis misses the fundamental point about Social Security's problems: There is no cash in the Social Security trust fund, and there never has been any.
The Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay. Far too soon, payroll taxes will be insufficient to pay all of the promised benefits. Unless Congress promptly takes action, taxpayers will have to pump hundreds of billions of additional tax dollars into Social Security to pay the promised benefits.
How the Trust Fund Operates.Workers pay their Social Security taxes through their employers. Each employer periodically sends a lump sum payment to the U.S. Treasury that includes all of the income taxes and Social Security and Medicare payroll taxes paid by both the employer and its employees.
The Treasury both receives the payroll taxes (and income taxes that higher-income retirees pay on their Social Security benefits) and pays monthly benefits on behalf of the Social Security Administration (SSA). The money stays in the Treasury's hands until it is either paid out as Social Security benefits or otherwise spent by the government. In fact, no money ever goes into the trust fund. Instead, the trust fund balance is the result of two accounting entries by the Treasury.
First, the Treasury estimates how much of the aggregate tax receipts are Social Security taxes and "credits" the Social Security trust fund with that amount. Then the Treasury "subtracts" the total amount paid in monthly Social Security benefits from the trust fund balance. No money actually changes hands; these are strictly accounting entries.
Any "money" remaining in the trust fund is converted into special-issue Treasury bonds, which are really nothing more than IOUs. In addition, the Treasury pays interest on the trust fund's balance by crediting the trust fund with additional IOUs. These are also strictly accounting entries, and again no money changes hands. After crediting the trust fund with the proper amount in IOUs, the government spends the extra Social Security tax collections just like any other tax revenue--to finance anything from aircraft carriers to education research.
At the end of 2002, the Social Security trust fund had a balance of $1.22 trillion. During 2003, the Treasury received $544 billion in Social Security taxes and paid out $406 billion in Social Security benefits. Therefore, the trust fund received $138 billion in these special-issue Treasury bonds, resulting in a trust fund balance of $1.36 trillion at the end of 2003.
Why the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only "invested" in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. As the Congressional Research Service noted in a report on May 5, 1998:
When the government issues a bond to one of its own accounts, it hasn't purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another.
You mean the “giant ponzi” is not working? Imagine that....
Since when is this news?
And, I’ll say it here clearly and now:
ANY expenditures by the FedGov that are on items not explicitly stated in the Constitution should be cut to $0 NOW:
Medicare, Social Security, Aid to foreign governments, block grants, student loans, etc. etc.
Our National Debt should be paid off COMPLETELY in 2 years, then Federal Taxes should be massively cut.
Let the states pay for all of these services, if they chose to.
The biggest promoter of the “trust fund” myth (beyond the FedGov itself) is AARP.
Their members will be mighty surprised when the Ponzi scheme implodes. That’s if any are still alive after the BaraqqiCare Death Panels.
Check this out.
Peter Schiff gets the Trustee of SS to admit its a ponzi scheme.
http://www.youtube.com/watch?v=ITMEZImvNio
Isn’t it true that years ago, Social Security was a completely separate organization, with its own money and payouts?
But then, somewhere along the way, Social Security’s budget and funds were merged in with the rest of the federal government. Social Security alone has had surpluses in recent years (surpluses on paper anyway), which were supposed to help fund the retirement of the baby boomers.
For example, those of you with 401k plans often have that plan run by an outside company. At my company, Fidelity adminsters the 401K plan. If my company has financial problems or goes out of business, the retirement assets in the 401K are still held by Fidelity.
But in the case of Social Security, the only “assets” held are these government bonds. So if the federal government ever goes broke, Social Security will be pulled down with it. And that’s the fundamental flaw. The retirement savings within Social Security should have been safeguarded just as company 401K plans are completely separate from the companies which set them up.
The future will tell us how this works out, but I’m skeptical about collecting much if anything from Social Security when retirement day arrives.
The Amazing Disappearing Trust Fund
By Dan Froomkin
Special to washingtonpost.com
Friday, February 11, 2005; 12:43 PM
President Bush slipped something new into his Social Security pitch on Wednesday. And it was there again twice yesterday.
He says Social Security’s $1.8 trillion trust fund doesn’t really exist.”
Don’t ever say you weren’t warned!
Issuing new debt, raising taxes or taking away from the rest of government, which is in far worse fiscal shape.
Have we a great congress or what?. /s
It is not the job of the federal government to operate retirement accounts for American workers. SS should be redesigned from a government run system to a personal individual account through the privatization process. And the sooner the better. President's Reagan and Bush43 both wanted to see SS placed on a path to privatization. Sadly, both men were hit hard by the “third rail of politics” and both were soundly bashed for their efforts.
Bottom line. Nuking SS is not gonna happen. The American people do not want to see SS done away with. Privatization is the ONLY answer long term to keep SS viable. Short term the retirement age must be raised and means testing must be applied. Then let the people invest their money for their own future.
There’s no Social Security trust fund, no “reserve” in the Federal Reserve (it isn’t Federal) and there’s no gold or silver to back up American “money”. Read what it says on the bills (notes) up top in the border.
“It does make you wonder how the governmant could prosecute someone for running a Ponzi scheme or counterfeiting money. “
The government doesn’t tolerate competition.
Terms and Definitions
SSucker: An American citizen conscript, of the United States Government, who is compelled under penalty of law to ‘invest’ in the federal Social Security and Medicare Ponzi schemes. Such a citizen must gamble in the fraudulent SS-Ponzi and MC-Ponzi schemes (games), or face incarceration.
Ponzieffect: The final result or results of any mechanism, plan, operation or scheme; which has the same financial outcome of a classic Ponzi operation or scheme. Any such ponzieffects are usually catastrophic in nature, with regard to loss of money, investments or other securities. Any such fraudulent Ponzi operation or scheme is normally and usually the results of criminal enterprise; except when administrated by the United States Government.
SS-Ponzi: The federal government’s Social Security Ponzi scheme or operation, which shall have the equivalent ponzieffects as any classic Ponzi scheme.
MC-Ponzi: The federal government’s Medicare Ponzi scheme or operation, which shall have the equivalent ponzieffects as any classic Ponzi scheme.
.
Reference: American Fairhope Retirement Plan.
http://www.americanfairhoperetirement.com/
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