Wednesday, August 11, 2010

The Big Lie: How Our Government Hoodwinked the Public, Emptied the S.S. Trust Fund

It's one of the world's biggest piles of funny money, but when the deficits get out of hand, no one will be laughing. 

There's real money in the world, then there's funny money -- stuff that looks real, but isn't.
Today, let's talk about one of the world's biggest piles of funny money -- the $2.54 trillion Social Security trust fund. The trust fund matters now, because Social Security revealed last week that it plans to tap it for $41 billion this year, and will begin tapping it on a regular basis in less than five years.
This year's cash deficit, the first since the early 1980s and the biggest ever, means the Treasury will have to borrow money to redeem some of the trust fund's Treasury securities. Even at a time when Uncle Sam is borrowing $1.5 trillion a year to keep his checks from bouncing, $41 billion is real money.
Here's why the trust fund has no economic value. Let's say I begin taking Social Security when I hit the full retirement age of 66 later this year. Because its tax revenues are below its expenses, Social Security would have to cash in about $3,400 of its trust fund Treasury securities each month to get the money to pay my wife and me. The Treasury, in turn, would have to borrow $3,400 from investors to get the money to pay Social Security. The bottom line is that the government has to borrow from investors to pay me, regardless of how big the trust fund is.
It's not surprising that Social Security is now running a negative cash flow -- I predicted a year ago it was likely to happen this year, and wrote in February that it had happened.
Democrats, for the most part, say everything's fine because the trust fund has a fat balance. Republicans, who were happy to have Social Security taxes subsidize tax cuts for 25 years, have suddenly developed holier-than-thou fiscal rectitude. They're both wrong -- the Democrats financially, the Republicans morally.
More Here..


  1. It's the old people that are killing this country. $3400 a month? That's more than most 20 somethings make for working the entire time (if they can even get a job in the first place) and more than even most doctors in their 30s and 40s make after taxes!

    I am sick of all these handouts! Let's stop giving handouts to old folks! They're always complaining about illegals and minorities and handouts, so let's throw it right back at them.

  2. I'm reasonably convinced that by now; the 5% that matter in this country are quite aware that our states and Government are basically broke.

    It remains to be seen how far out they can ride the wave; but the big money is saying 2012 is going to be one Helluva year!

  3. 4:57 I don't think it's any ONE entity that's "killing us" - it's ALL the entitlements.

    Collectively they are staggering & like Charlie rangel - we just can't seem to get rid of them; even after they are exposed.

  4. That's $3400.00 a month for two people. That's $1700.00 each.

    My elderly next door neighbor likely earns about the same, before taxes. His housing and utility costs are about $1200.00.

    Oh yea, he's choking on money!

  5. 5:14 Good point, but you misspelled "yeah". Yea means "yes" like "yea or nay"

  6. Yes you guys are absolutely right. pay into social security for 50 years then allow the government to cut it off and give you nothing PLUS keep the money. Cut the old people off, give them zero. Bright group of losers we have here..

  7. everybody is wrong about the money ,it really does grow on trees,but mostly now it grows as bytes in computers and there is plenty of food and plenty of cars and plenty of houses and plenty of everything else .,its just that the bankers control the money supply .and give it to the government , corporations and and other countrys but wont give you 10,000 a year for basic support, rebell i say, put the banker federal imf out of commission, america take your country back support the restore america plan

  8. sounds good give everybody 10,000 a year and give all woman and men the option of a $10,000 one time payment to have their tubes tied, no welfare here ,and wf 10,000 is enough the go to work if you are ambitious, after all 1 farmer can feed 10,000 people with our huge farm eguipment, everyone can lay on their ass or go to school or go to work or just plan do what men and women were meant to do ,live free instead of being slaves to some banker imf rulers

  9. I can't decide if we're heading for a meltdown or a death spiral.

  10. Social Security is not an entitlement. Get your facts straight.

  11. I can't decide if I'm heading into a psychosis or a black hole.

  12. It didn't help that SS was put into the stock market and lost billions in 08 when it crashed. It had no business being put at risk like that. I'll never see the 40 years I've been paying into it. I could have used that money too....

  13. "Uncle Sam is Borrowing $1.5 Trillion a year to keep his checks from bouncing."

  14. My wife and I are 65 yrs. old, I have NEVER missed a day of work due to illness, my wife and I have played by the rules, we worked, we saved, we never bought anything that we knew we could not afford, we did chariable work, raised children and they went to college.

    Not once were we ever on any assistance from the state or federal gov't. If you were tight on money, you sucked it up and waited until tou had the money to pay for it. Both my wife and I have paid into the SS system for over 45 yrs., do I feel we are entitled to it? Absolutely!

    No. 1, we and the folks that play by the rules should not be penalized for the mishandling and misapproiation of monies, the fund should never have been put into a general fund in the first place. However, people should always be thinking ahead. We never put all of our eggs in one basket. Otherwords, for the past 25-30 years, people have spent money and felt that the bottom would never fall out. Reckless spending, houses (knew they could not afford it), they weren't buying homes, they were buying an investment. Well, most of theur investment went South. I was always told what goes up comes down. For all of the poor planning, "shop till you drop" crowd, as Jerimaih Wright would say,"the chikens have come home to roost"!

    The crooked, dishonest and vile little weasels that run these agencies should be held in contempt.

  15. Obama “Mr. Mass Destruction”

    The More Liberal the State the more Bankrupt it is Morally And Finically The Evil of the Liberals Democratic Party

    I found this in a comment section too good not to share with everyone.
    June 3rd, 2010 at 11:41 pm

    I found this gem among the trash accumulating in my mailbox. It came from a Conservative but if that tempts the Liberals among you to call it a pack of lies, I hope you’ll prove it.
    Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

    1.) That participation in the Program would be completely voluntary,

    2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

    3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year.

    4.) That the money the participants put into the independent “Trust Fund” rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

    5.) That the annuity payments to the retirees would never be taxed as income.

    Since many of us have paid into FICA for years and are now receiving a Social Security check every month — and then finding that we are getting taxed on 85% of the money we paid to the Federal Government to “put away,” you may be interested in the following:

    Q: Which Political Party took Social Security from the independent “Trust” fund and put it into the General fund so that Congress could spend it?

    A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

    Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

    A: The Democratic Party.

    Q: Which Political Party started taxing Social Security annuities?

    A: The Democratic Party, with Al Gore casting the “tie-breaking” deciding vote as President of the Senate, while he was Vice President of the U.S.

    Q: Which Political Party decided to start giving annuity payments to immigrants?

    A: That’s right! Jimmy Carter and the Democratic Party.

    Immigrants moved into this country, and at age 65, began to receive SSI Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

    Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

    And the worst part about it is, uninformed citizens believe it! Perhaps we are asking the wrong questions during this 2004 election year! If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve.

  16. I'm just waiting for you whiners to get older, fall apart, develop medical problems, lose your ability to earn much money, and have your teeth fall out. Oh, and can't see to drive at night or hear what the guy next to you is saying.

    Then try to live on $1200 a month, which is what the average SS payment is. After you pay the rent, the electric, the heating, the phone, and buy food, you've got enough left over to buy Fido a bone and see a discounted matinee movie. Of course you'll have to walk to the theater because you can't afford a car.

    I paid into SS for 25 years. It's not an entitlement, it's a trust fund--which the lying Republicans now want to get their hands on. That's because their friends, the banksters and hedge fund managers, can make oodles of fees by investing your SS money in the casino stock market. And if the market goes down, then government and state welfare will save your sorry ass while Wall Street pays itself million dollar bonuses.


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