The Social Security Trust Fund
To many Americans, the social security trust fund is a mystery. To me, the trust fund is a scandal. The politicians have spent $2.5 trillion from the trust fund and replaced that money with IOUs. What does this mean to the millions of Americans who depend on social security now and who will depend on it in the future?
At a town hall meeting, I asked my Congressman: “Why don’t you politicians put the money back into the trust fund that you have spent since 1970?” He said: “I would have to raise your taxes to do that.” Why would we have to pay more taxes for him to replace our money that he spent? The National Commission on Fiscal Responsibility and Reform (the Deficit Commission) says they have to cut social security in order to lower the national debt. How does putting our money into the trust fund have anything to do with the national debt? None of this makes sense unless you understand how the trust fund scam works.
Every penny of social security revenue that isn’t paid out in benefits is spent by the politicians. The money they spend is replaced with IOUs which are government bonds. The bond liability and the “interest” are tacked on to the national debt. The bonds, supposedly, will be “redeemed” with future tax revenue. In other words, the taxpayers are stuck with the bill for the money that the politicians spend! What a scam. But wait, it gets worse, much worse.
The national debt is somewhere between $12.5 and $13 trillion. The “bond vigilantes” have been threatening to downgrade U.S. treasury debt and raise our government borrowing costs. This is the weapon the bond market will use to make sure they get first crack at those tax dollars not the people on social security. And, of course, the bond vigilantes’ friends on the Deficit Commission are doing their best to cut social security in order to give more money to their friends, the bond vigilantes.
Job losses and pay cuts from globalization and the Great Recession have tipped the trust fund into the red. I repeat, GLOBALIZATION AND THE GREAT RECESSION have tipped the trust fund into the red, not government spending. For some reason, (campaign contributions?), politicians seem much too willing to take the blame for the economic damage done by the private sector. The banks wrecked the global economy but somehow “the Government” gets the blame.
It is extremely unlikely that the politicians will ever replace the trillions of dollars they raided from the trust fund. The limitations of our current debt based monetary system and our exploding national debt make repayment virtually impossible. It is important to remember, however, that the trust fund money that was spent by the politicians was SPENT BY THE POLITICIANS. Wouldn’t that mean that the politicians owe the money to the trust fund? Why can’t we take that money out of their paychecks and put all the politicians into the social security system with the rest of us? I’ll bet that would get a lock box on the trust fund money.
I explain how we can replace the raided money and make the trust fund permanently solvent in my article Social Security / Pensions.
The social security system is not a Ponzi scheme. It is an excellent system that has been compromised by politicians and idiotic economic policies. The trust fund is the scam. The scandal has three parts. Part 1: The politicians are spending the trust fund money with no way of ever replacing our money. Part 2: The financial services “industry” wants to get their hands on our social security money. When their friends in government wreck the system, the American people will be more willing to accept “privatization.” This sounds like a classic Washington/Wall Street squeeze play to me. Part 3: For more than six years, I have been writing to politicians, academia and the media promoting a Constitution-based, debt-free monetary solution to the social security funding problem. I have been stonewalled with a monolithic wall of silence.
Today, the Deficit Commission is poised to strike another blow against elderly and disabled Americans. We must fight back. Six years of frustration have shown me that writing, calling or E-mailing politicians is a waste of time. So, I will try another way to establish a dialogue with the powerful people who have so much control over our lives:
I challenge Alan Simpson, Erskine Bowles and all the members of the National Commission on Fiscal Responsibility and Reform (the Deficit Commission) to a public debate on this web site. I can be contacted at:
Committee to Elect Ray Uhric
P O Box 815
Coraopolis, PA 15108 – 0815
The American people deserve a complete and objective discussion of the fiscal challenges facing this nation. I believe that the law, the United Stated Constitution and the historical record stand behind the Lincoln/Kennedy Monetary Reforms proposed on this web site. The Deficit Commission meets and deliberates in secret. Do they dare to come out from the shadows and defend their actions in public, on this web site? The historical record and the American people are waiting.