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Social Security is not an “entitlement” program

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Marti Oakley(c)copyright 2011 All Rights Reserved

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Social Security is an investor funded program that has also been used to fund the government, it is NOT an entitlement program nor was it intended to be any form of welfare.  The “entitlement” the government speaks of would be more aptly applied to them; they feeling they are entitled to avail themselves of our investments and use that money for whatever they choose to. 

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A long coveted cut to Social Security and Medicare is going to happen.  This will occur for reasons none of the politicians in the District of Criminals will ever speak about publicly.  There is far more at stake here than what the District terms an “unfunded liability”.  When you hear those in the District speak about this liability, you need to understand what they are really saying.  This is an intra-governmental debt, meaning; a debt accrued within the government. It is a liability to the federal government because it is owed to “you” and they have no way of paying it back without taxing you more heavily.  You are the “full faith and credit” of the United States corporation.  That means government runs up the bills and we pay it. 

The federal government now includes Social Security in its debt portfolio, not because the program is insolvent or ever was, and not because the Federal government has to fund it in any sense (SS is funded by your investments) but because the Federal government has stolen so much money from the fund, then sold special treasury securities on those stolen funds to countries like China to finance the massive debt accruing across the board.  Since there is no chance the national debt can ever be repaid, the Fed is now in the position of finagling the discharge of internal debt from the books.  Look at it as a form of back door bankruptcy. 

The federal government DOES NOT fund Social Security!  Social Security funds the federal government.  More

Social Security Surplus…A big Welfare Check for federal government

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Marti Oakley (c)copyright 2010  All Rights Reserved

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From the years 1984 to 2002 the US government had collected 1.7 trillion more in social security taxes than it paid out in claims.  By 2006 this surplus had ballooned to 2.4 trillion in excess SS taxes.  This is 2.4 trillion in excess of all claims paid to widows, retirees, orphans and disability benefits.  And, it is this 2.4 trillion surplus that has Wall Street slobbering all over itself trying to come up with plans on how to siphon that money off of SS and into Wall Street markets.

 

Where did the surplus go?

 

Every administration since Lyndon Johnson, who made the SS trust surplus available to the general fund to finance the Viet Nam war, has used the SS fund to finance anything and everything.  The current president has used the SS surplus to finance the day to day operations of the federal government in lieu of the massive loss of tax revenues generated by the tax cuts to the obscenely wealthy. 

 

The reason that administration economists insisted that the economy was growing was because Social Security surpluses were used to finance tax cuts for people who were so rich they didn’t need them.  On paper, and without admitting the theft of and misuse of funds, the economists reported a “growth” in revenues generated by cutting taxes to the rich. That growth was a direct result of re-designating the stolen funds as “tax revenues”. 

 

What the Bush Republicans have done is to use Social Security taxes so the wealthy can enjoy big huge tax cuts.  More

Today we know why they wanted to privatize Social Security

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For more than three years I have written about the dangers of privatizing Social Security.  As I said before, all you would own is the money you invested and only so long as the selected stock or fund was solvent.  So many people had come to believe that they would own something; they didn’t know what…but something and many thought they could become rich.   

 

Those funds would be subject to rolling management fees, service fees, brokers’ fees and taxes.  The taxes were the big winner here, amounting to nearly 50% once you needed to tap into those retirement funds.

 

When you did need to tap into them, a formula would be used to determine if and how much you could draw out and at what price to the account.  The truth of the matter was and is, by the time all the fees were assessed and all the taxes were applied, and the formula was calculated you would receive little if anything from these privatized accounts.  And why? You ask.  Because there was never any intention for anyone to reap any profit, much less any of the principle invested from these accounts except for those who owned the stock or fund…..which wouldn’t be you.  Gone would be the days when certain indexed stocks and funds had to vie for investors.  Under the privatization plans, money would flow in on a consistent basis.  As anyone knows who has invested in the markets, one day you are up and the next day you aren’t.  If you have money to risk without endangering your own financial stability this might not concern you.

 

Privatization was seen simply as a cash infusion into a risky and unstable market.  It was a cash flow that has long been coveted by Wall Street if for no other reason than it is a constant and massive amount that rolls in day after day, week after week.  

 

While we are assailed with the horror stories of “unfunded liabilities” concerning Social Security, those telling these tales very carefully never mention that the SS fund has consistently produced a massive surplus since its inception.  No fund that produces a consistent annual surplus can possibly be going broke; unless, of course, some outside force is tampering with it. 

 

One argument used to convince workers that privatization was necessary was, “In 1960 there were sixteen workers for every one person collecting benefits, and now there are only three for every claimant”.  What they didn’t tell you was that those three today are making more than the sixteen altogether.  Not only are they making more, they are paying in at a higher rate. 

 

Not one of these promoters of privatization mentioned that every president since Johnson, who made the SS fund available to the general fund to finance the Viet Nam war, have spent every last dime of each and every surplus each and every year since then.  Bush has used this surplus to cover the loss of revenue to give all his elite buddies and friends those massive tax breaks.  SS has been funding the day to day operations of the federal government since then. 

 

In what has to be a joke, the Electronic Social Security E-booklet, says, “

 

“SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds”.

http://www.ssa.gov/pubs/11000.html

 

Since the Social Security funds are added to the general treasury slush fund, I really don’t know how they can make this statement.  There is no trust fund….just ask any politician.  Every surplus from every or any program out there is immediately consumed and spent by the federal government. 

 

As major banks crumble and fall as a result of unregulated trade, unscrupulous CEO’s, and free trade capitalism without regulation, we can clearly see why Bush & Co. wanted to co-opt Social Security.  These people knew first hand what they were doing and knew without the needed influx of forced market investments what the result would be.

 

None of this was supposed to happen the way it did.  Those of us out here were to take the loss, but that would come many years from now when it was far too late to hold those responsible, accountable. As it is, taxpayers are going to bail out these financial giants one way or the other.  Our investments in SS will continue to finance everything but our retirements, and now we will be taxed into extinction so one more corrupt institution can remain afloat.  Regardless of who wins this next election, taxes on the middle class are going to have to rise to cover the bailout of AIG and others.  The super wealthy will not see any rise in their taxes because as we all know its unfair for them to have to contribute.   

 

Try asking your senator or representative what the shortage would be in federal funds if the SS investments were secured against theft, by those in government, and used only for the intended purpose.  And it is theft, plain and simple.

 

© 2008 Marti Oakley

 

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