Social Security is already bankrupt…

…I know that with the main-stream-media (MSM) spouting dates from next year to 2525 for the demise of the Social Security ponzi scheme, most of you may find this hard to believe, but, lets look at some facts.

First, there is no Social Security trust fund. It looks like there may have been, for the first three years (called the “Old-Age Reserve Account”), but, then congress figured out what a cash cow it had and ended it. The money was transferred automatically to the general fund and the intake and disbursments became, simply, an accounting entry in the treasury reports. The tax is nothing more than another “income” tax and the payments are only another entitlement program.

Despite the term “trust,” the Social Security system contains nothing that remotely resembles the common law trust. There is no segregation of assets, no equitable property rights, no private right of enforcement (all characteristics of the common law trust). It is merely a system of taxation and appropriation sprinkled with trust terms to hide its true nature.[18]

Moreover, Social Security’s Trust Fund does not operate as a trust fund does. Social Security revenues go into the Treasury’s general fund and are automatically credited to the Trust Fund in the form of Treasury bonds. The Treasury pays Social Security benefits and administrative outlays out of general revenue and debits the Trust Fund an equivalent value of bonds. Any leftover Social Security revenue finances general government operations, with an equivalent value of bonds remaining in the Trust Fund as Social Security’s “surplus;” to cover any revenue shortfalls.[19] This is how a Treasury account, not a trust fund, works. And calling a Treasury account a “trust fund” to influence public opinion does not make it one.

In all respects, then, Social Security’s Trust Fund is bogus.

Second, there are no benefits. This is a federal entitlement program which you must qualify for to receive a disbursement. All monies contributed to the ‘system’ are forfiet at the time of your donation. You have no further claim to them. If they had not set it up this way, it would have been bankrupt just a few years after it was ‘adopted’. They will be shrinking the benefits as time goes on. At the same time they will be blaming the current workers for problems in the ‘scheme’. This will pit the retired against the working, the old against the youmg and, in fact, already is causing resentment and voter battles among these groups. Remember, the art of politcs is to keep society in dishevel.

Third, the federal government does not take in enough money[sic], right now, for its own operations. There is nothing left and they have been borrowing for a long time, but in the last four years they have increased borrowing exponentially. There is nothing left and we are running on borrowed time…borrowed from our childrens future…and their childrens future. What kind of un-caring and thoughtless parents would railroad their kids in such a fashion and not own-up or try to end it?

And finally, this privatization scheme is just another fraud. By the time you factor in brokerage fees, inflation and the fact that you will be taxed again when you start withdrawing, not to mention the so-far unstated ‘administation’ costs of having government control all aspects of the funds, you will find that you always have less than if you had just saved it yourself or better yet bought gold and silver (the only currency that has lasted 5000 years without failing).

From “The Mogambo Guru” November 25, 2004:

– Phil Spicer, whom I was going to refer to as “my friend and pal” with the hope that he would feel obliged to buy me a tall frosty one and maybe let me come over to his house and maybe, you know, I could sort of hide out at his place for awhile until things, you know, kind of cool down, and maybe we could send out for a pizza because that would be nice, too, But he says that he prefers to be addressed by persons of my ilk as “Chairman of Central Fund of Canada Limited, listed on the Amex as CEF and Co-Chairman of Central Gold-Trust listed on the TSX as GTU.UN”. Well, not only is he good at putting worthless people like me in my place, but he is also somewhat of a whiz on the calculator, and writes, “$5.89 in 2004 dollars equals the purchasing power of $1.00 in 1966.”

Seeing how that kind of mathematical wizardry stuff impresses the girls, I cannot resist putting on a little of calculator magic show of my own. With a flourish I whip out my calculator, and proceed to compute that this dollar devaluation works out to, ummm, 4.77% a year. So, anyone who invested a dollar in 1966 had better get back $5.89 just to break even, in terms of buying power. And that is before tax! And since the government is going to insist on taking at least a quarter of that gain, you had better have made a hell of a lot more than 5.89% on your money!

He notes that the Dow was at about 1,000 in 1966, and that “The DJIA closed at 10,549 on 17 Nov 04, equaling 1,791 in 1966 dollars. Thus, the DJIA has advanced by 79.1% over 38 years in constant dollars.”

And what is THAT inflation-adjusted return? It is a real, inflation-adjusted annual gain of 1.54%! Hahahaha! Less than 2% real return a year! Hell, the government will take more than that away in taxes! Which only proves my point: You cannot make money in the stock market over the long-term, and you have to save like hell just to be able to break even after inflation and taxes eat your guts out.

The government will control (they use the term administer) your funds and determine which stocks and bonds you may choose from. They will also control the disbursement (and you won’t have any say in the matter), that is, once you meet the Social Security qualifications.

All of this looks like they are trying to prop up the stock and bond markets with private funds. I think the “Plunge Protection Team” can’t keep up with the wildly swinging markets (they are swinging wildly because manipulation always leads to unintended consquences and a progresively harder to control market).

Todd Andrew Barnett, over at the Liberty for All website covers more of this…

Once upon a time, Republicans held the high moral ground on the belief that the state should stay out of the economic and social affairs of the American people. That even includes their belief that government ought to get out of the retirement business. But that was only an aberration. By and large, Republicans have never supported economic and personal liberty on a grand scale, and they never will.

If people haven’t caught on by now, they ought to understand that Social Security must die. Along with many other government programs, departments, and machinations, retirement is the responsibility of an individual – not the state. Whether Americans want to acknowledge it or not, it’s time to get back on the fast track to individual liberty, personal responsibility, free enterprise, private charity, limited government, federalism, and the rule of law.

It’s time for Americans to jettison the ever-growing amount of socialism here in America and bring back the principles of libertarianism, which made this country so special and revered. And Americans will continue to do that in the years to come.

More here…

Such schemes are not just criminal in the moral sense, but also in the Constitutional sense…

In 1794, James Madison, the acknowledged father of our Constitution, wrote disapprovingly of a $15,000 appropriation for French refugees saying, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” This vision was restated even more forcefully on the floor of the House of Representatives two years later by William Giles of Virginia, who condemned a relief measure for fire victims. Giles insisted that it was neither the purpose nor the right of Congress to “attend to what generosity and humanity require, but to what the Constitution and their duty require.”

In 1854, President Franklin Pierce vetoed a bill intended to help the mentally ill championed by the renowned 19th-century social reformer Dorothea Dix. In the face of scathing criticism, President Pierce said, “I cannot find any authority in the Constitution for public charity.” To approve such spending, President Pierce added, “would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

President Grover Cleveland was the king of the veto. He vetoed literally hundreds of congressional spending bills during his two terms as President in the late 1800s. His reason, as he often said: “I can find no warrant for such an appropriation in the Constitution.”

Many Americans erroneously believe that the Constitution’s “general welfare” clause serves as justification for congressional spending on anything they can muster a majority vote. That surely wasn’t the vision of the Framers. In 1798, Thomas Jefferson wrote: “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.” Specifically enumerated referred to the listing of congressional authorization found in Article I, Section 8 of the Constitution. James Madison elaborated on this limitation in a letter to James Robertson: “[W]ith respect to the two words “general welfare,” I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” — From “How Did We Get Here?” by Walter E. Williams


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