Well might one ask today with regard to Social Security, "Where's the trust fund?" that was supposedly locked away in the "lock box" Bill Clinton used to talk about. In the category of lies politicians have told me, that one could only be called "The Whopper!" (with apologies to Burger King).
Like most political realities we face today, my fellow Americans, there IS no trust fund with fungible assets. That's what the meaning of the word "IS" is. What we have instead is a "bookkeeping adjustment" made with each year's budget. I will qualify that statement quickly, because it all depends on what your definition of "fungible" is. If you are satisified with an explanation that the trust fund is filled with IOUs from the Treasury to retirees, then you'll be happy to know the trust fund is full of that kind of asset. If you insist on something more tangible, however, you will be disappointed to learn there's no "beef" between the big fluffy, yummy political double-speak going on in Washington today.
The Social Security Ponzi Scheme
That's why Alan Simpson called it a "Ponzi scheme" the other day in his Senate testimony. The original "inventor" was not a man named Charles Ponzi, but when he deployed its tactics his name was forever associated with it and he went to prison for his crimes.
Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt. When politicians wrangle over the budget, it's more than mere political posturing. Nobody really wants to declare the Emperor has no clothes for fear of incurring the wrath of a growing segment of the voting public -- we baby boomers who actually believed there would be something there for us when we retired.
The portion of the national debt that is not considered "publicly held" represents the obligations incurred by the government to itself, the bulk of which consists of the government's obligations to the Social Security Trust Fund.
So what we really have is a "promise to pay," from our government. The actual assets of the fund were consumed long ago.
The trust fund contains the securities that will be redeemed to make benefit payments in the future when contributions derived from payroll taxes and self-employment contributions no longer are sufficient to fully fund then-current benefit payments. (Here's the rub: Whether or not this is a meaningful topic for discussion depends upon one's belief in the sustainability of the unified Federal budget).
Freshmen Senators Mike Lee (R-UT) and Rand Paul (R-KY)
My position, of course, is that the day of reckoning has arrived and our current course is unsustainable. It's the case Mike Lee and Rand Paul, two young freshmen senators are now trying to make to their esteemed establishment colleagues. If we fail to choose now as free men, our freedom of choice will be overtaken by the immutable law of financial gravity and we will land hard.
The number of contributors to the trust fund has been in gradual decline since the average life expectancy of a retiree was 63 years of age. Now average life expectancy is 77, still a little higher for women than for men.
The first POTUS to bring up the nature of what's really going on inside the trust fund was George W. Bush. On February 2, 2005, he made Social Security a prominent theme of his State of the Union Address. The public debate over this issue has never been quite the same since. The fund holds non-negotiable (the opposite of "fungible") United States Treasury bonds and U.S. securities backed "by the full faith and credit of the government."
The OMB and the Empty Cupboard
In an effort to clarify, the bi-partisan and apolitical body, the Office of Management and Budget, describes it this way:
"These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense. . . They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims [nothing more than IOUs] on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits." (From FY 2000 Budget, Analytical Perspectives, p. 337, emphasis mine).
It took me awhile to wrap my pea-sized brain around that admission, but here it is: "You let me take some periodic payments (as in a FICA deduction out of every single paycheck you earn over your lifetime), and I will promise to pay you an annuity someday when you retire. Oh, and don't worry, I'm the U.S. Treasury and I'm good for it."
That's it, my friends. GWB was pilloried for even suggesting U.S citizens might do a better job of managing their own retirement funds better than the U.S. Treasury -- remember "private accounts?" -- and now six years later we're still having the same debate. It centers on one simple feature -- who will choose and make decisions, the individual or the federal government? Nothing has changed much since the original war in heaven where the question was first posed. We're here today because we chose agency, leaving us free to choose. Are these IOUs claims against real resources? Or are they worthless pieces of paper backed by nothing but "good faith and credit?" Shall we be self-determining free Americans like our ancestors, or will we bow to the misrepresentations and fraud of the federal government? For me, the answers to the questions are distilling rapidly.
Krauthammer the Truth Teller
his weekly column today is this analysis by Charles Krauthammer:
"The new line from the White House is: no need to fix it because there is no problem. As Office of Management and Budget Director Jack Lew wrote in USA Today just a few weeks ago, the trust fund is solvent until 2037. Therefore, Social Security is now off the table in debt-reduction talks.
"This claim is a breathtaking fraud.
"The pretense is that a flush trust fund will pay retirees for the next 26 years. Lovely, except for one thing: The Social Security trust fund is a fiction." (Italics in original).
"Here's why. When your FICA tax is taken out of your paycheck, it does not get squirreled away in some lockbox in West Virginia where it's kept until you and your contemporaries retire. Most goes out immediately to pay current retirees, and the rest (say, $100) goes to the U.S. Treasury — and is spent. On roads, bridges, national defense, public television, whatever — spent, gone.
"In return for that $100, the Treasury sends the Social Security Administration a piece of paper that says: IOU $100. There are countless such pieces of paper in the lockbox. They are called 'special issue' bonds.
"Special they are: They are worthless. As the OMB explained, they are nothing more than 'claims on the Treasury (i.e., promises) that, when redeemed (when you retire and are awaiting your check), will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.' That's what it means to have a so-called trust fund with no 'real economic assets.' When you retire, the 'trust fund' will have to go to the Treasury for the money for your Social Security check."
I got into a exchange on the forum board the other day in a local newspaper over this very topic. Is there money in the bank, or is this a fraud? You be the judge. It's not a fraud, I guess, if we can all collectively continue to muster and believe the myth the government is being well-run. If we don't believe in the government's ability to pay its obligations, after all, then our money is also worthless, because that's what our money is based upon -- that same promise. It's called "fiat money," "cross-my-heart-and-hope-to-die-I'm-good-for-it" money. They used to say, "Don't take any wooden nickels," but now they all appear to be wooden.
Krauthammer puts the final nail in the coffin:
"Why is this a problem? Because as of 2010, the pay-as-you-go Social Security system is in the red. For decades it had been in the black, taking in more in FICA taxes than it sent out in Social Security benefits. The surplus, scooped up by the Treasury, reduced the federal debt by tens of billions. But demography is destiny. The ratio of workers to retirees is shrinking year by year. Instead of Social Security producing annual surpluses that reduce the federal deficit, it is now producing shortfalls that increase the federal deficit — $37 billion in 2010. It will only get worse as the baby boomers retire." (Emphasis mine).
So basically, there aren't many accounting tricks left to invent -- they've all been employed -- and the average American Joe, whom the government elitists always figured was just too dumb to figure all this out, is finally awake and on task. He and his buddies are tossing out the bums who are running this scheme and choosing self-determination instead. Meanwhile, Obama thinks he's got enough people dumbed down and content now that he'll blame the enemy and ride his high horse to re-election in 2012. We have this reality before us, however. Our "watchmen on the tower" have seen the enemy coming from afar off, and the enemy is us unless (and until) we wake up.
True Prophets Always Get it Right
|Joseph Smith the Prophet|
There is no salvation in the collective salvation being offered by the federal government. If you thought there was, better make other plans and find the real God in your life. The United States of America still has a vital role to play in preparing the world for the Second Coming of Jesus Christ. I still believe it, but now after watching Barak Obama and his minions at work for two years I've had to add some "qualifiers." Those include "if" we wake up before it's too late.
|President Harold B. Lee, 1973|
He could have added, "If we hold fast to that foundation of principles." If we do, we will not be deceived into accepting this government we now see as our God. It is illusory, anti-Christ and delusional. What you can see and touch (government) is imaginary at best, and what you can't see and touch (the real God of heaven) ironically "has a body of flesh and bones as tangible as man's." (D&C 130:22-23).
The so-called "Christian world’s" definition of God is founded on fiction not unlike the Social Security Trust Fund. When the scholars at Nicea defined Him as being "three in one and one in three without any body parts or passions," Christianity went astray. It took a magnificent latter-day theophany of the Father and the Son in a personal appearance to the boy Joseph Smith to put Christianity back on track again. The only problem in the world is it's hard for most to salute a fourteen-year-old's testimony as authentic. But then again, why would he lie? I testify he didn't.
Whenever we allow ourselves to be misled by sophistry, one has only to observe how benighted, deceived and darkened we subsequently become as a human family. Wanting to believe a fiction, cannot, worlds without end, make that fiction into an abiding absolute truth with merit.
Join me in putting your faith in the only living and real God there is -- the one you can't see and touch just yet -- the one that is sending back His Son to clean up the mess we've made. By the power of the Holy Ghost, however, you can feel Him in your heart of hearts where the absolute truth always resides.
I conclude with one further insight from Joseph Smith:
“. . . other attempts to promote the unusual peace and happiness in the human family have proved abortive; every effort has failed; every plan and design has fallen to the ground; it needs the wisdom of God, the intelligence of God, and the power of God to accomplish this. The world has had a fair trial for 6000 years; the Lord will try the seventh thousand himself.” (TPJS, 252).
Planning on government to give you cradle-to-grave security and collective salvation? Better make other plans.