Posted on 07/15/2002 2:05:27 PM PDT by PatriotReporter
Social Security Called A Bigger Fraud Than Corporate Scandals
(CNSNews.com) - A public policy think tank devoted to individual liberty and free-market capitalism says the current frenzy in Congress and elsewhere to address corporate accounting scandals isn't a reaction to fraud. It's an attack on business and capitalism, said the Ayn Rand Institute.
The Institute wonders why lawmakers and others aren't looking at the Social Security program.
Robert Tracinski, a senior fellow at the Ayn Rand Institute, said, "People leading the hysteria about corporate crime are eager to expose and condemn any alleged fraud by private businessmen, but they ignore or excuse actual fraud committed by government officials.
"They demand strict accounting regulations to prevent billion dollar business frauds while they evade responsibility for a trillion-dollar government fraud," he added.
Tracinski described Social Security as "the world's largest fraudulent scheme." The program, he said, takes one-eighth of the income of the current generation of workers and promises them a secure retirement, to be paid for by fleecing the next generation of workers.
He said it's ironic that no one in Washington is demanding an end to Social Security.
"Eventually, as with any such scheme, the number of new suckers coming into the system is not enough to pay the benefits owed to retirees. This is projected to happen in the next 10 to fifteen years, causing Social Security to go bankrupt, but no one in Washington is demanding an end to Social Security," he said.
"To tolerate wholesale fraud and theft by government, while posing as a moralistic crusader against fraud by private businesses is a con game that makes the crowd at Enron look like small-timers," Tracinski concluded.
Sen. John McCain (R-Ariz.) agreed on Thursday that government "does not always set a sterling example of honesty to corporate executives.
"Too often, we have cooked the books, exploited off-balance sheet accounting, fudged budget numbers and failed to disclose fully the nation's assets and liabilities. If we in Washington are to have credibility in the public eye as we address the corporate accounting mess, we must reform our own fiscal practices," said McCain.
But McCain said the best way to ensure the "solvency" of the Social Security system is to honor the "solemn promise that in exchange for the payroll taxes they have rendered all their working lives, all Americans will receive a minimally adequate retirement income." He also believes Americans should be allowed to invest a portion of their payroll taxes in the financial markets.
"Allowing Americans to invest responsibly a small part of their payroll taxes will not only save Social Security, but will provide them with greater retirement income than those who no or will soon depend on Social Security checks," said McCain.
by Rep. Ron Paul, MD
U.S. House of Representatives, July 9, 2002
It is now commonplace and politically correct to blame what is referred to as the excesses of capitalism for the economic problems we face, and especially for the Wall Street fraud that dominates the business news. Politicians are having a field day with demagoguing the issue while, of course, failing to address the fraud and deceit found in the budgetary shenanigans of the federal government – for which they are directly responsible. Instead, it gives the Keynesian crowd that run the show a chance to attack free markets and ignore the issue of sound money.
So once again we hear the chant: "Capitalism has failed; we need more government controls over the entire financial market." No one asks why the billions that have been spent and thousands of pages of regulations that have been written since the last major attack on capitalism in the 1930s didn't prevent the fraud and deception of Enron, WorldCom, and Global Crossings. That failure surely couldn't have come from a dearth of regulations.
What is distinctively absent is any mention that all financial bubbles are saturated with excesses in hype, speculation, debt, greed, fraud, gross errors in investment judgment, carelessness on the part of analysts and investors, huge paper profits, conviction that a new era economy has arrived and, above all else, pie-in-the-sky expectations.
When the bubble is inflating, there are no complaints. When it bursts, the blame game begins. This is especially true in the age of victimization, and is done on a grand scale. It quickly becomes a philosophic, partisan, class, generational, and even a racial issue. While avoiding the real cause, all the finger pointing makes it difficult to resolve the crisis and further undermines the principles upon which freedom and prosperity rest.
Nixon was right – once – when he declared "We're all Keynesians now." All of Washington is in sync in declaring that too much capitalism has brought us to where we are today. The only decision now before the central planners in Washington is whose special interests will continue to benefit from the coming pretense at reform. The various special interests will be lobbying heavily like the Wall Street investors, the corporations, the military-industrial complex, the banks, the workers, the unions, the farmers, the politicians, and everybody else.
But what is not discussed is the actual cause and perpetration of the excesses now unraveling at a frantic pace. This same response occurred in the 1930s in the United States as our policymakers responded to the very similar excesses that developed and collapsed in 1929.
Because of the failure to understand the problem then, the depression was prolonged. These mistakes allowed our current problems to develop to a much greater degree. Consider the failure to come to grips with the cause of the 1980s bubble, as Japan's economy continues to linger at no-growth and recession level, with their stock market at approximately one-fourth of its peak 13 years ago. If we're not careful – and so far we've not been – we will make the same errors that will prevent the correction needed before economic growth can be resumed.
In the 1930s, it was quite popular to condemn the greed of capitalism, the gold standard, lack of regulation, and a lack government insurance on bank deposits for the disaster. Businessmen became the scapegoat. Changes were made as a result, and the welfare/warfare state was institutionalized. Easy credit became the holy grail of monetary policy, especially under Alan Greenspan, "the ultimate Maestro."
Today, despite the presumed protection from these government programs built into the system, we find ourselves in a bigger mess than ever before. The bubble is bigger, the boom lasted longer, and the gold price has been deliberately undermined as an economic signal. Monetary inflation continues at a rate never seen before in a frantic effort to prop up stock prices and continue the housing bubble, while avoiding the consequences that inevitably come from easy credit. This is all done because we are unwilling to acknowledge that current policy is only setting the stage for a huge drop in the value of the dollar. Everyone fears it, but no one wants to deal with it.
Ignorance, as well as disapproval for the natural restraints placed on market excesses that capitalism and sound markets impose, cause our present leaders to reject capitalism and blame it for all the problems we face. If this fallacy is not corrected and capitalism is even further undermined, the prosperity that the free market generates will be destroyed.
Corruption and fraud in the accounting practices of many companies are coming to light. There are those who would have us believe this is an integral part of free-market capitalism. If we did have free-market capitalism, there would be no guarantees that some fraud wouldn't occur. When it did, it would then be dealt with by local law-enforcement authority and not by the politicians in Congress, who had their chance to "prevent" such problems but chose instead to politicize the issue, while using the opportunity to promote more Keynesian useless regulations.
Capitalism should not be condemned, since we haven't had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It's not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military – industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!
To condemn free-market capitalism because of anything going on today makes no sense. There is no evidence that capitalism exists today. We are deeply involved in an interventionist-planned economy that allows major benefits to accrue to the politically connected of both political spectrums. One may condemn the fraud and the current system, but it must be called by its proper names – Keynesian inflationism, interventionism, and corporatism.
What is not discussed is that the current crop of bankruptcies reveals that the blatant distortions and lies emanating from years of speculative orgy were predictable.
First, Congress should be investigating the federal government's fraud and deception in accounting, especially in reporting future obligations such as Social Security, and how the monetary system destroys wealth. Those problems are bigger than anything in the corporate world and are the responsibility of Congress. Besides, it's the standard set by the government and the monetary system it operates that are major contributing causes to all that's wrong on Wall Street today. Where fraud does exist, it's a state rather than federal matter, and state authorities can enforce these laws without any help from Congress.
Second, we do know why financial bubbles occur, and we know from history that they are routinely associated with speculation, excessive debt, wild promises, greed, lying, and cheating. These problems were described by quite a few observers as the problems were developing throughout the 90s, but the warnings were ignored for one reason. Everybody was making a killing and no one cared, and those who were reminded of history were reassured by the Fed Chairman that "this time" a new economic era had arrived and not to worry. Productivity increases, it was said, could explain it all.
But now we know that's just not so. Speculative bubbles and all that we've been witnessing are a consequence of huge amounts of easy credit, created out of thin air by the Federal Reserve. We've had essentially no savings, which is one of the most significant driving forces in capitalism. The illusion created by low interest rates perpetuates the bubble and all the bad stuff that goes along with it. And that's not a fault of capitalism. We are dealing with a system of inflationism and interventionism that always produces a bubble economy that must end badly.
So far the assessment made by the administration, Congress, and the Fed bodes badly for our economic future. All they offer is more of the same, which can't possibly help. All it will do is drive us closer to national bankruptcy, a sharply lower dollar, and a lower standard of living for most Americans, as well as less freedom for everyone.
This is a bad scenario that need not happen. But preserving our system is impossible if the critics are allowed to blame capitalism and sound monetary policy is rejected. More spending, more debt, more easy credit, more distortion of interest rates, more regulations on everything, and more foreign meddling will soon force us into the very uncomfortable position of deciding the fate of our entire political system.
If we were to choose freedom and capitalism, we would restore our dollar to a commodity or a gold standard. Federal spending would be reduced, income taxes would be lowered, and no taxes would be levied upon savings, dividends, and capital gains. Regulations would be reduced, special-interest subsidies would be stopped, and no protectionist measures would be permitted. Our foreign policy would change, and we would bring our troops home.
We cannot depend on government to restore trust to the markets; only trustworthy people can do that. Actually, the lack of trust in Wall Street executives is healthy because it's deserved and prompts caution. The same lack of trust in politicians, the budgetary process, and the monetary system would serve as a healthy incentive for the reform in government we need.
Markets regulate better than governments can. Depending on government regulations to protect us significantly contributes to the bubble mentality.
These moves would produce the climate for releasing the creative energy necessary to simply serve consumers, which is what capitalism is all about. The system that inevitably breeds the corporate-government cronyism that created our current ongoing disaster would end.
Capitalism didn't give us this crisis of confidence now existing in the corporate world. The lack of free markets and sound money did. Congress does have a role to play, but it's not proactive. Congress' job is to get out of the way.
Dr. Ron Paul is a Republican member of Congress from Texas.
bttt.
It's only ironic if the person thinks the government has high standards of ethics, integrity and honesty. Or ironic because that's the image they want people to perceive. That's where the mainstream media and academia join the party -- a government party. Honest, hard-working citizens need not apply.Robert Tracinski, a senior fellow at the Ayn Rand Institute, said, "People leading the hysteria about corporate crime are eager to expose and condemn any alleged fraud by private businessmen, but they ignore or excuse actual fraud committed by government officials.
"They demand strict accounting regulations to prevent billion dollar business frauds while they evade responsibility for a trillion-dollar government fraud," he added.
He said it's ironic that no one in Washington is demanding an end to Social Security.
Reporters are too lazy to put forth the effort. They choose to open doors wherever possible and keep them open. The very people the media should be reporting as crooks, criminals and scoundrels are the ones they praise. What a colossal hoax it is. For of course the interviewee -- the bigger the better to which politicians and bureaucrats are among the biggest with academics and "specialists" bought by the media mantra of open all doors coming in right behind -- those people/ crooks being interviewed would never open the door if he or she knew that the reporter intended expose them as frauds.
There's a large and growing cadre of articulate, well-thought-out writers on the WWW. They are the opposite of the lazy reporters that rely on the easy-to-open doors of covering for crooks. In essence, they are unreal doors that can slam back shut in their face.
For the articulate writers on the Web, their open doors are among themselves, and their readers. Their essence is that they have to honestly earn an open door policy with their interviewees and they welcome their readers feedback. Often looking for other articulate writers of integrity and honesty among the feedback they get from readers.
That the mainstream media is liberal biased is not a reflection of congress or the alphabet bureaucracies. It is with both Republicans and Democrats that the government is what it is. The whole good-guy-bad-guy betwixt political parties is a ruse. For voting for the lesser of evils still begets evil.
As Mr. Brown used to jokingly ask us neighborhood kids, "Do you want a fat lib or a busted eyebrow?" That was not lost on me. From Democrats you get one, from Republicans you get the other. There are no winners and losers in politics for they (reps and dems) are two sides of the same coin. The only losers are the citizens, their prosperity and well-being which is mostly represented by the business community. The only winners are parasitical politicians and self-serving bureaucrats. ...Hot on their heels the mainstream media and academics catering to the the government crooks.
The genie is out of the bottle.
Congress has created so many laws that virtually every person is assured of breaking more than just traffic laws. Surely with all this supposed lawlessness people and society should have long ago run head long into destruction. But it has not.
Instead, people and society have progressively prospered. Doing so despite politicians creating on average, 3,000 new laws each year which self-serving alphabet-agency bureaucrats implement/utilize to justify their usurped power and unearned paychecks. They both proclaim from on high -- with complicit endorsement from the media and academia -- that all those laws are "must-have" laws to thwart people and society from self-destruction.
Again, despite not having this year's 3,000 must-have laws people and society increased prosperity for years and decades prior. How can it be that suddenly the people and the society they form has managed to be so prosperous for so long but suddenly they will run such great risk of destroying their self-created prosperity?
The government is the all time champion of cooking the books and it has the gall to point fingers at the whole business community because of a few bad apples. The entire business community and employees that support it should stand tall against a government feigning to protect the little guy from organizations that cook their books.
If there was ever a prime example of the fox guarding the hen house it is the government claiming to protect the little guy from organizations that cook their books. President Bush will have to militarily smash down terrorism. For that is his job. It's not the President's, congress or' the government's job to manipulate the economy.
The business community with their employees will have to stand tall against the PC-status-quo fox -- self-proclaimed authorities claiming/feigning they'll use the government to protect the little guy and a complicit media and academia that supports them; for they are all the fox -- to regain their rightful place as the champions of honest business that has always increased the well-being of people.
The government, having already manipulated the economy to almost no-end, President Bush can play the unbeatable five-ace hand of replacing the threat-of-force IRS and graduated income tax with a don't-pay-the-tax-if-you-don't-want-to consumption tax. For example, implement the proposed national retail sales tax (NRST). Not only would that win votes for Bush and republicans in congress it would boom the economy.
Where will it lead?
War of Two Worlds
Value Creators versus Value Destroyers
Politics is not the solution. It's the problem!
The first thing civilization must have is business/science. It's what the family needs so that its members can live creative, productive, happy lives. Business/science can survive, even thrive without government/bureaucracy.
Government/bureaucracy cannot survive without business/science. In general, business/science and family is the host and government/bureaucracy is a parasite.
Aside from that, keep valid government services that protect individual rights and property. Military defense, FBI, CIA, police and courts. With the rest of government striped away those few valid services would be several fold more efficient and effective than they are today.
Underwriters Laboratory is a private sector business that has to compete in a capitalist market. Underwriters laboratory is a good example of success where government fails.
Any government agency that is a value to the people and society -- which there are but a few -- could better serve the people by being in the private sector where competition demands maximum performance.
Wake up! They are the parasites. We are the host. We don't need them. They need us.
* * *
"Too often, we have cooked the books, exploited off-balance sheet accounting, fudged budget numbers and failed to disclose fully the nation's assets and liabilities. If we in Washington are to have credibility in the public eye as we address the corporate accounting mess, we must reform our own fiscal practices," said McCain.
Prove it first. It's not like it's a new discovery or problem. It's a seventy-year-old problem. It's just that now politicians and bureaucrats have trapped themselves and the general public is becoming increasingly aware. They've been caught and McCain is getting interview time to peddle gussied-up compassionate government.
"Allowing Americans to invest responsibly a small part of their payroll taxes will not only save Social Security, but will provide them with greater retirement income than those who no or will soon depend on Social Security checks," said McCain.
Notice McCain so readily wants himself and government to allow Americans to invest part of their own money. But he has a condition; it most be done responsibly. And who decides what is responsible? Certainly not the all-time champion, cook-the-books bureaucrats and snake-oil-salesmen politicians.
The communists made it popular. The USA has had communists influenzing government ever since Lincoln.
I cannot understand why we are asking Congress to investigate a problem they built! This is like asking a thief to determine if something was stolen or found. "Of course, it was found " will be the verdict everytime.
It frustrates me far more than federal income taxes. At least I feel like I am getting some benefit from those (roads.. schools, something!). But social security just ticks me off. Yipee, I can pay for the "Greatest Generation"'s retirement. Fun stuff.
I cannot understand why we are asking Congress to investigate a problem they built! This is like asking a thief to determine if something was stolen or found. "Of course, it was found " will be the verdict everytime.
That's how it is with the mainstream media opening government doors to interview and ask reporter-type questions. Of course no politicians or bureaucrats will open the door to a new reporter or journalist with integrity to take the high road even when it means exposing the frauds of those that opened the door.
It's such a colossal hoax. Question to ask that undercut that even the sheeple can grasp. (Knowing even they have little reason to have confidence or trust in the media. Yet they could surely use more information to confirm their suspicions.)
Do you really think a politician or bureaucrat would welcome an interview conducted by a reporter or journalist that was going to expose their participation in government fraud? Do you think mainstream reporters and journalists would expose the politicians and bureaucrats for their frauds knowing that they'd be shutting the door to any future interviews with that politician or bureaucrat and his cronies?
I'm switching strategies now. Shortly, I'll pay off all my debts and home mortgage. That will drastically reduce the need for a large income stream. I'll adjust my AGI downward by funding as much deferred retirement as I can tolerate. I still need enough to pay property taxes, insurance, utilities and the usual food and clothing expenses. The game plan is to reduce my taxable income as low as possible without becoming unnecessarily uncomfortable.
The feds have taking $50K to $70k from me every year for many years. I'm tired of pulling the wagon for the socialist state. The state government has been raking off $7K to $18K each year. No more. The politicians can raid someone elses earnings.
This is the biggest scam in D.C. going, and so few Americans (and Freepers) are aware of it. No, I'm not talking out my elbow - when outlays outpace receipts in a few years, our economy is gonna take a hit.
Get real...it's in the lock box!
...which is just behind those old books on 'Constitutional Government' in the White House attic, IIRC. ;^)
Every election comes down to two shmucks saying he's the one who can put a stronger padlock on an empty treasure chest.
And the dummies who vote scream "right on!"
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