Social Security is 75, and it Needs to be Put Out of Its Misery

Social Security turns (turned?) 75 this week! Let's see what we have to show for it:

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Yup, that's right. That program that was supposed to be optional, 1% of your income, with funds held aside to guarantee that you'd be repaid, is broke. CONgress spent all of it - every last dime. Much like Madoff, as new funds are coming in from current payers, they're being immediately sent to folks who are payees, because those folks' money was spent by the Government to keep up the wonderful utopian mirage of Progressive Socialism.

And here we sit. Each paycheck I get has 7% taken out of it, with jailtime or summary execution by Federal SWAT team awaiting me if I refuse to pay it, and I know with absolutely certainty that I'll likely never see a dime of the money I'm paying into it. That 7%, which could be used to invest in an account I CONTROL, which could be kept safe from the idiots in Washington that think that they're entitled to EVERYTHING you own, is sent to a group of people that piss it away on such high-minded activities as funding cocaine addiction studies on monkeys.

Need some fun analysis? Try this article from the Market Ticker: Revoke Krugman's PhD

That so-called "trust fund" is a fraud. It does not exist.

Here's what actually happens (and Krugman knows this, which makes him a damned liar besides):

• Your tax dollars go to Treasury.
  
• Treasury keeps them and issues "special" Treasury bonds to the Social Security "trust fund."
  
• Treasury counts these tax receipts against the federal deficit, making it look (much, until the last year) smaller than it really is.
  

Note the slight-of-hand here. Social Security gets an alleged "bond" but they can't sell it to anyone but the Treasury. That is, legally it is an IOU, not a bond. A bond can be marketed in the open market to anyone who is willing to buy, for whatever they're willing to pay. These are unmarketable (intentionally) and thus can only be redeemed in one place - at Treasury.

The problem is that Treasury spent the money and thus doesn't have anything with which to redeem the IOUs!

So in order to redeem these alleged "bonds" Treasury will have to sell more bonds - this time to the general public (foreign governments, people, etc) who have actual capital surplus, because Treasury doesn't - it blew that surplus on social spending programs right here and now.

This is similar to you coming to me with $100,000 and I "promise" to hold on to it for you and keep it "safe." I give you a promissory note to this effect. But I never hold the funds - I immediately go blow them on hookers, coke and limousines. You now have a bunch of IOUs, and I have no money.

Now perhaps I can manage to sell someone else some bonds when you come to redeem those IOUs. Perhaps. But what is unmistakable and true is that the money you allegedly "deposited" with me was immediately dissipated, not invested, saved, held or secured.

This little scheme seems to work just fine provided that each year the Social Security system takes in more than it spends on benefits - that is, so long as the file cabinet full of IOUs continues to get bigger. Treasury gets the appearance of "Free Money", Social Security is able to pay benefits, nobody's the wiser.

But it's a scam, because in point of fact the so-called "Special Bonds" are nothing more than a bare promise to pay and the asset against which they were issued (tax receipts) was instantly dissipated!

The Baby Boomers are retiring, and there's nowhere near enough of us younger folks to keep this program solvent. "The Government will just cover the difference!" you say. Bull. We're currently spending $1.4 TRILLION MORE THAN WE MAKE. That is, the U.S. brings in around $2 trillion in revenues each year, and is currently spending $3.4 trillion. All of that money is coming in the form of a printing press from Treasury, or foreign investment - at the moment, Chinese funds.

"Well, the Government is aware of the problem and they're going to do something to fix it!" Wrong again. Check out this little gem (and it's a talking point for sure - I heard the exact same phrase from DemocRAT after DemocRAT on the news yesterday):

Social security at 75: don't mess with success (Rep. Sander Levin)

From that article:

Seventy-five years ago this month, President Roosevelt signed the Social Security Act. By any yardstick, Social Security has been the most successful domestic program in our nation's history, lifting millions of seniors out of poverty. Through good times and bad, American workers and their families have been able to rely on Social Security to provide guaranteed protection against the loss of earnings due to retirement, disability, or death.

This mental midget then goes forward with his talking point arguments of "had we allowed people to privatize Social Security and invest it in the stock market, they'd be broke right now". What tripe. Yes, the market goes up and down. Yes, you can lose money. However, Social Security pays around 1%. That doesn't even cover the massive inflation we have seen over the last 75 years, no where close. Having money in Social Security means you've LOST a significant portion of your "investment". I can get a better rate of return with that money in a Savings Account at a local bank that is insured by the FDIC.

Privatization doesn't mean you HAVE to invest your Social Security in risky equities, but it gives you the option of managing your OWN money. Personal accountability. Oops, can't have that - just let your betters in Government handle that for you - you can't be trusted with your own assets. Just give them to us so we can spend every last penny on bull$!@#.

It's far past time to stop this madness. Do away with the system. Every day Americans dump in good money after bad, and most of us will never see a dime. Robbing us to pay for the actions of politicians we were too young to even vote for isn't the answer - especially when we're all pretty sure that we won't ever see a dime of what we put in come back to us. How are we supposed to secure our retirement if we're told that we must pay for yours?

Social Security Ponzi Collapses

Social Security to Start Cashing Uncle Sam's IOUs

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices. (emphasis mine)

The money that the Government put away for you (remember - you pay into a fund that is supposed to pay your money back to you when you retire) is gone. It doesn't exist. All of those funds they were collecting for all those years - YOUR FUNDS - has been pissed away on unneeded inferior widgets produced by inferior companies that just happen to have connections in Congress. It's official, it's ALL GONE.

The national debt — the amount of money the government owes its creditors — is about $12.5 trillion, or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.

The Government takes in about $2 trillion a year in taxes, payments, or what have you. That's the "salary" of the Federal Government, ALL of it each year. That's your money out of your paycheck, when you buy gas, food, alcohol, make a profit on stocks, etc. etc. etc. We owe SIX TIMES that much to various entities, much of it to foreign nations hostile to the United States. And yet Obanana and his useful idiots in Washington are spending $1.5 trillion MORE this year than they could even hope to take in. That's like a family making $50,000 a year spending $75,000 in a particular year when they ALREADY owe creditors over $300,000 (and we're not talking mortgage debt on a house here)! How can anyone POSSIBLY think that the Feds can EVER pay that back?

Look in your bank account and ask yourself the following:
Do you have $42,000 for EACH of your family members (yes, that includes 6-month old Trevor) to just give to the Government? Because that is what it's going to take to clear the books out RIGHT NOW. Give those bastards in Washington a few more years and it will be far more than that.

It's time for the States United to say "NO MORE" and cut the Federal Government loose. Repossess their properties among the States, including all of that land they just like to up and grab when they feel like it (National Parks anyone?), and see how long they last with the District of Columbia as their only source of material income.

I don't know about you, but I'm tired of our currency being treated as funny money, our children, childrens' children, and childrens' childrens' children reduce to nothing more than cows to be milked at will by corrupt and evil people, as well as slaughtered when those people get the urge to exert their "authority".

Screw 'em. Let their empire burn. It's time for the States to save themselves before things get really bad.

If you are so against Social Security, how do you propose we live in our old age?

I received an email from a so-called "Conservative" and "Pro 2nd Amendment" person today. I'll hit the highlights here:

Having searched http://tyrannyunleashed.blogspot.com/search/label/social%20security, this person went on to say they had lost their retirement in the recent market crash, and that at 60, they needed Social Security to live on. They then asked me what my agenda was.

The post they are referencing is here. As to my "agenda", it is simply this: We can not pay for this stuff. We just simply can not mathematically pay for it.

Social Security was never meant to be your sole retirement income. It was meant to provide a partial pension to make things easier. Workers were expected to provide personal savings, income from children, and corporate pensions to supplement Social Security to allow themselves to stay under a roof and fed.

Over time, corporate pensions have gone away, and in this day and age of consumerism, easy credit, etc, one can not necessarily rely on their children any more either. Observe further that we've gone from a decent house being a postage stamp (by today's square footage estimates) to a 3000sqft luxury retirement home in AZ.

Finally, since we now don't really have a Social Security surplus, the plethora of retiring boomers is creating a situation where Social Security has turned into a ponzi scheme. The money I'm paying into it is going straight into another investor's pocket to keep the checks flowing. And since we're facing a declining population of people paying into the system, we're headed for a giant shipwreck.

The coffers got this way by Congress deciding that Social Security funds were fair game for them to spend (sound familiar???) So now, the funds that this person paid into the fund for their own retirement are long gone - again, it's my money that is going to allow them to retire.

So here is the question. Should I keep paying my money into a system that I know will very likely be completely bereft and bankrupt by the time it's "my turn" to collect? Should I starve down the line because somehow I bear responsibility for Government mismanagement, when all this time it has been people older than myself putting up with the looting and repeatedly voting for more looters? By 2050, the annual Social Security deficit, in 2001 inflation adjusted dollars, will reach $419bil - almost half of the entire Income Tax revenues collected for a year.

The answer? I don't think that people who are about to retire should be cut off and starved, but I also don't think my income taxes need to be raised by 81% (to almost 44% of my income), crippling my ability to live and prosper, let alone save money so that I don't starve when I'm 65 and there is little in the way of social programs left to serve me just so that a bunch of people who didn't save enough to retire can do so.

Furthering my issues with Social Security is the awful return I will get from the monies stolen from me (assuming that number isn't flat out $0). As a single male born around 1977, I'll earn less than .5% on the money I put in to the system when I it is finally returned to me at 65. I could do far better than that on safe Government Bonds alone. Again, I am punished for others' irresponsibility.

Why do I say my money is "stolen"? The Supreme Court ruled in 1960 (Flemming v. Nestor) that I have no ownership or right to the monies taken from me for Social Security benefits. This essentially means that the Government could capriciously tell me next week that I will never see that money again, and I have no recourse (short of going to the rifle).

So what you're basically saying by insisting that I give you my money so you can retire, and insisting that I pay nearly double my taxes so that you retire, with the full knowledge that the system very likely can't survive even long enough for me to get my money back out of it, is that you don't give a good *** damn about my ability to stay solvent, to save for my own future, or to live my life as I please. You'd rather raise my taxes, empty my bank accounts, foreclose on my home, remove the food from my mouth, and trample my Liberty so that you can retire in comfort.

Pardon me if I don't agree with that.

I would encourage you, dear friends, to read about Social Security over at the Heritage Foundation. If you are truly Conservative and Pro-Constitution, I want you to understand what it is you are really demanding when you command us to save Social Security at all costs.

My agenda? My agenda is to attempt to ensure that everyone has the best chance, under the restrictions set forth in the Constitution, to Life, Liberty, and the Pursuit of Happiness in this country - and raising taxes to support failed Socialist programs is not the way to do that.

Our Unfunded Obligations

The 81% Tax Increase

From Forbes comes an excellent real idea of what I have been talking about in previous posts regarding our National Debt, and the unfunded obligations we have in the forms of Social Security and Medicare.

There is NO WAY we can afford either of these programs in their current form, without jacking taxes up 81%.

From the article:

To put it another way, Social Security's unfunded liability equals 1.3% of the gross domestic product. So if we were to fund its deficit with general revenues, income taxes would have to rise by 1.3% of GDP immediately and forever. With the personal income tax raising about 10% of GDP in coming years, according to the Congressional Budget Office, this means that every taxpayer would have to pay 13% more just to make sure that all Social Security benefits currently promised will be paid.

...

To summarize, we see that taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP. This adds up to 8.1% of GDP. Thus federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.

Since many taxpayers have just paid their income taxes for 2008 they may have their federal returns close at hand. They all should look up the total amount they paid and multiply that figure by 1.81 to find out what they should be paying right now to finance Social Security and Medicare.

Go take a gander and see what the jackasses in Government are setting us up for.