The Open Fraud of Social Security

Posted on July 16, 2011 by RepealTheBailouts

THIS is the open fraud of Social Security, that most Americans are disgracefully unaware of:

Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036.  So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?

The answer is that the federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted.  And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling.

What Happened to the Social Security Trust Fund — Merrill Matthews’ “Right Directions Blog”, Forbes

American citizens have the power to vote for representatives to run the government — and consequently, a moral obligation to learn and understand how important parts of our system work. The fact that most Americans don’t understand that there is nothing (and can be nothing) in the “Social Security Trust Fund” represents a massive failure of the most basic level of civic responsibility that comes along with the right of self-governance. For that reason, those who have abdicated this responsibility have no right to claim to be innocent victims when they finally do learn that Social Security is a government-run Ponzi Scheme with no actual assets. And they have no right to complain when it’s revealed that they’ve already lost everything that’s been taken from them in payroll taxes over the years.

The fact of the matter is that there is nothing in the trust fund but IOUs — that is, notes offering to raise the money to pay them back through further borrowing or taxes. If you don’t fully understand what that means, then take a moment to really consider it. Consider the outrageous injustice of the government taxing you to pay for your retirement, and then borrowing that money from itself and spending it — leaving a note in its place that it’ll just tax you and your children again tomorrow to pay you back for the taxes that it borrowed from you and your parents yesterday. That was money that you could otherwise have saved and invested to pay for your own retirement, without the need for government alms, and could have left to your heirs. Instead, it’s been squandered in an orgy of reckless government spending the like of which has never before been seen in all of human history, bringing the United States to the very brink of financial armageddon.

The money that we all paid in Social Security taxes over the years has already been spent. It is long gone. The only way to pay current recipients is to rip off the next generation, which has no chance of ever being repaid for their contributions. Well, if someone has to take the hit and not be repaid — and someone does, with any Ponzi Scheme when it finally collapses — then it should be the current and pending generations of recipients. They are the ones who are responsible for allowing such a corrupt system to continue for so long, and who fought against efforts to reform it in the previous decade. It should not be the innocent next generation that they’re planning to hand the tab for their reckless irresponsibility.

Posted in Entitlement Reform | Leave a comment

Herman Cain: Another RINO Phony

Posted on May 11, 2011 by RepealTheBailouts

So Herman Cain turns out to be just another bailout-loving RINO phony:

Far from Nationalization, Purchase of Bank Stocks Is a Win-Win for Taxpayers – Herman Cain, North Star Writers Group, October 20, 2008

With an opinion like this one, why was I not surprised to learn that he served as Chairman of the Federal Reserve Bank of Kansas City? And he has the nerve to rail against people who object to being ripped off to bail out his politically connected banking buddies as “free market purists?” Give me a break.

Posted in Politics | 2 Comments

The “Homer Simpson Approach” to Social Security

Posted on April 12, 2011 by RepealTheBailouts

I’m pleased to note that Paul Hsieh’s latest article on PajamasMedia quotes from and links to my post On Eliminating Social Security, here on the Repeal the Bailouts Blog:

The Homer Simpson Approach to Social Security by Paul Hsieh

Paul’s article is excellent, as always. Like my post, it shines a light on the “dirty secret” of Social Security: that everything that’s been “paid in” to the so-called trust fund over the years is now gone. There are no “assets” left in it except a promise to stick tomorrow’s workers with the tax bill for the already squandered payments of yesterday’s. As Thomas Jefferson implicitly observed (Jefferson on Future Debt), that’s a prospect and a burden that one generation has no right to impose on the next — and as I argue, that the latter has no moral obligation to accept.

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Lemonaid

Posted on March 21, 2011 by RepealTheBailouts

This clever video won second place in the recent Atlas Shrugged Video Contest. It very effectively dramatizes the injustice of punishing competence and virtue, and rewarding incompetence and vice at its expense. It’s very apropos for the theme of “Repeal The Bailouts,” especially with the magazine headline and the comments at the end.

Stop the Cycle. Don’t Reward Incompetence.

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The Emperor’s New Clothes Gambit, Take 1

Posted on February 17, 2011 by RepealTheBailouts

The Powerline blog has an incisive piece that’s worth reading on the astonishing disconnect from reality displayed by President Obama’s new 2012 budget proposal, and his comments on it at a subsequent press conference:

Is the Obama Administration On Another Planet When It Comes to the Budget?

President Obama, with a breathtaking disregard for the facts, claimed that under his FY 2012 budget, the federal budget would no longer be running a deficit as of the middle of the decade… This is not a debatable point. This is a screen shot of page 171 of the Obama administration’s FY 2012 budget proposal. I have highlighted the row titled “Deficit.” You will see that Obama’s budget runs a huge deficit every year from now through 2021. [Link added]

Commentators so far seem to be torn between two (equally frightening) speculations on this: that the administration is simply clueless on the actual facts of the budget and doesn’t understand the numbers, or is being deliberately dishonest in how it presents them to the American people.

Regrettably, I lean toward the latter. This looks to me like a textbook example of a rhetorical technique that I often observed, and then named, many years ago in Usenet debates during the 1990s. I call it the Emperor’s New Clothes Gambit. It consists of brazenly offering a rationally indefensible assertion with exaggerated (and faked) self-confidence, in the hope that others without knowledge or confidence about their position will be intimidated by that tone and fail to challenge it. It’s related to (and something of a cross between) what Ayn Rand identified as the Argument from Intimidation and a scaled-down version of the “Big Lie” propaganda technique, particularly in their attempts to prey upon the reader’s or listener’s self-doubt and ignorance. That’s why I decided to name this post “The Emperor’s New Clothes Gambit, Take 1″ — and “Take 1,” unfortunately, because I anticipate the need for many more such takes in our foreseeable political future.

In any event it’s heartening to see this nonsense being challenged, for example by Senator Sessions in the following video clip:

“So I don’t think it’s a little bitty matter. I don’t think it’s subject to gentleman’s disagreement. I don’t think it’s subject to anything other than black and white — yes or no — is that an accurate statement or not? It’s not true.”

Posted in Politics | 1 Comment

‘Obamacare’ Ruled Unconsitutional

Posted on February 1, 2011 by RepealTheBailouts

As reported in the news yesterday, The ‘Patient Protection and Affordable Care Act’ — colloquially known as ‘Obamacare’ — has been ruled to be unconstitutional, in its entirety, by a Florida court. This is the case in which 26 US states filed suit (not including Virginia, which filed separately) to overturn the act.

In his ruling, Judge Roger Vinson found that the so-called “individual mandate” to buy health insurance violated the US Constitution. He further declared that since the individual mandate was not “severable” from the rest of the act, that all of it had to be thrown out:

For the reasons stated, I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate… Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.

Judge Vinson gets to the heart of the issue with this gem:

It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be “difficult to perceive any limitation on federal power” [Lopez, supra, 514 U.S. at 564], and we would have a Constitution in name only.

Furthermore, Judge Vinson made it clear that that his ruling is intended to immediately stop the implementation of Obamacare:

“Injunctive relief is an “extraordinary…” and “drastic” remedy… It is even more so when the party to be enjoined is the federal government, for there is a long-standing presumption “that officials of the Executive Branch will adhere to the law as declared by the court. As a result, the declaratory judgment is the functional equivalent of an injunction.” See Comm. on Judiciary of U.S. House of Representatives v. Miers, 542 F.3d 909, 911 (D.C. Cir. 2008); accord Sanchez-Espinoza v. Reagan, 770 F.2d 202, 208 n.8 (D.C. Cir. 1985) (“declaratory judgment is, in a context such as this where federal officers are defendants, the practical equivalent of specific relief such as an injunction . . . since it must be presumed that federal officers will adhere to the law as declared by the court”) (Scalia, J.) (emphasis added).

“There is no reason to conclude that this presumption should not apply here. Thus, the award of declaratory relief is adequate and separate injunctive relief is not necessary.”

For the record I think that the last paragraph is a bit naive when applied to the scoundrels in the current administration. Indeed, I’ve already seen that assessment confirmed in news reports stating that the law will continue to be implemented, contrary to the clear language of the judge’s ruling:

“The White House, taking a long view of the many legal challenges to what critics call “Obamacare,” is continuing to implement key provisions of the law pending a final decision by the courts. The administration plans to appeal the Florida decision.”

There are many things that can be said about the moral and legislative debacle that has become known as ‘Obamacare,’ but I’ll restrict myself for now to the following observations. Over half of the US States object so vehemently to this law that they are suing the Federal government to have it enjoined. Members of many state legislatures have openly started talking about passing state laws to nullify it. Washington was flooded with letters and protesters against it when it was passed, and polls consistently show that over half of the country supports its repeal. And the first legislative act of a new House majority, swept into power by the largest swing in congressional representation in generations, was pointedly to pass just such a repeal. When all of that is happening nearly a year into its history, then there is something fundamentally wrong with the legislation in question.

There is no saving ”Obamacare.” It is fundamentally misguided, economically destructive, repugnant to the individual rights guaranteed by our nation’s constitution, and profoundly immoral. The sooner that it is permanently voided in its entirety, and we can turn to passing legislation that will actually reform health care in the US, the better. These would include such policies as the expansion of HDHPs and HSAs, reform of the discriminatory tax system, tort and mandate reform, and so on — in short, the basic reforms outlined in John Mackey’s Wall Street Journal Article from a year and a half ago. The Democratic majority in the 111th Congress deliberately shut out any discussion of these rational, common sense, and free market solutions to our health care crisis, and it is long past time that they were put back on the table.

Posted in Health Care, Politics | Leave a comment

A Moral Revolution

Posted on January 27, 2011 by RepealTheBailouts

The reason why statists have been so aggressive about spending other peoples’ money through government coercion is because, like most of the rest of our culture, they have been indoctrinated in the morality of altruism. They actually think that forced redistribution of wealth for the benefit of the “less fortunate” is moral, and they feel virtuous in doing it — and in doing it by force.

Too often, that belief serves as a rationalization for a deeper and uglier motive, which goes hand in hand psychologically and philosophically with altruism. That is the twisted attempt to give meaning and validation to their own sorry lives through what they do for others. The desire, and even the need, to control the lives of those others follows directly from that.

That’s why Ayn Rand always said that it’s not enough to advocate capitalism on “practical” grounds; it has to be defended on moral grounds. Until the morality of altruism is replaced in the minds and hearts of the people with a respect for reason, rights, individual sovereignty and dignity, and rational self-interest, the statists will remain armed with their most dangerous weapon: an evil and destructive moral code.

In order to accomplish this, what is needed is a moral and philosophic revolution led not by conservatives or “libertarians,” but by radicals for capitalism.

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Jefferson on Future Debt

Posted on January 24, 2011 by RepealTheBailouts

From Founders’ Quotes:

But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years.

Thomas Jefferson: 1789

At least as indicated by this quote, Jefferson appears to have understood very well the immorality and destructiveness of running up public debt, and passing it on to the next generation to pay off. Yet that is precisely what our entrenched welfare state entitlements such as Social Security and Medicare do today.

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‘Obamacare’ as Pull Peddling

Posted on January 21, 2011 by RepealTheBailouts

A good law should apply to everyone equally. That is what equality under the law is supposed to mean in a free society. If it doesn’t, then it is not only a bad law, but an affront to the rule of law and to the principle of equality under the law itself. As Congressman Rogers’ article recent article makes clear, the job-killing health care law is nothing less than an open invitation to political corruption and favoritism. That is one reason why it must be repealed, and immediately — before it can do any more damage.

Need a Waiver from Obamacare? Get in line – U.S. Rep. Mike Rogers, The Detroit News, January 18 2011

Posted in Health Care, Politics | 1 Comment

On Eliminating Social Security

Posted on January 12, 2011 by RepealTheBailouts

Should one advocate a gradual phaseout of Social Security and Medicare, or outright abolition? That’s a question on which I’ve had mixed thoughts for a while. On the one hand I see the point of Ayn Rand’s own statements in support of a phaseout because people have become dependent on the system. But my attitude has been hardening on this over the years, and I find myself agreeing with the “Too bad — it’s not my fault” argument that I’ve started to see some of my younger friends and acquaintances advancing.

Here are the facts about Social Security and Medicare as I see them:

  1. ALL of the money that has been collected for these programs has already been spent. It’s gone, period. The only way to get some of it back now would be to start liquidating federal government assets, such as the obscenely large amount of land it owns in the American west.
  2. Legally, Social Security and Medicare are nothing more than income taxes, collected under the authority of the 16th Amendment. The Supreme Court has twice ruled that the federal government has no fiduciary responsibility whatsoever to repay a cent of the money that it has collected in FICA taxes. That’s because legally, and all propaganda to the contrary notwithstanding, that’s all that they are — just income taxes.
  3. The current and near-future generations of retirees are not blameless in the disaster that’s about to befall them. And I say that as a baby boomer whose demographic is among those likely to get hit hardest by it when it does.

Some of us who have always opposed these programs may tend to over-project our own understanding and convictions about them onto the general public. I think that’s a mistake. Social Security and Medicare would have been eliminated years ago if the American public had chosen to act rationally and responsibly about the matter. They didn’t.

Instead, as recently as a few years ago, the Bush administration was once again electrocuted for trying to touch the third rail of American politics and propose merely a semi-partial privatization of Social Security. The facts about these programs have been available to the American people for decades, and they have evaded the responsibility of facing them. In my opinion, most of my generation will get exactly what it deserves if the next decides not to accept the role of sacrificial animal and tells us to go to hell.

I would argue that no one who would be affected by the elimination of Social Security and Medicare has had any right or any business expecting them to be there when they retire. Those of us who have had the resources with which to plan our retirement accordingly have either been doing so, or will deserve what happens when the system that we sanctioned for so long finally hits the fan. I know that I have, and it’s required me to live a much more modest lifestyle than most as a result.

So I’m not inclined toward any sympathy toward most of my generation on this issue. The only ones I do sympathize with are those who’ve recognized what’s wrong with the system and have helped to fight it, but who (thanks to the payroll tax itself) haven’t had the resources with which to plan for retirement on their own. Those folks I’d like to see helped by private charity.

One objection that I’ve heard regards the “property rights of those who paid into the system their entire lives and are entitled to something back from it — especially when they’ve been guaranteed those entitlements.”  Well, I’m sure that the victims of Bernie Madoff wanted their money back, too. That doesn’t change the fact that it’s gone, squandered by a crook running a Ponzi Scheme. So is the money my generation paid into Social Security. At least most of Madoff’s victims can actually claim to have been defrauded; Social Security and Medicare, by contrast, have been openly run as pyramid schemes since their inception.

If action had been taken as late as ten years ago, something could have been done to contain the damage and avert the disaster we’re now facing. Instead, seventy years worth of voters have continued to elect leaders who have perpetuated and even expanded this destructive system. Indeed, their overwhelming refusal to elect leaders who would have rolled it back (such as Barry Goldwater in 1964) is the reason why it’s become known as the “third rail of American politics.” Because of this, relatively few Americans were truly forced into the system and can claim to be innocent victims of what is to come. And that is why protecting them from the consequences of their actions by trying to keep the system going any further would be just another bailout.

As I said, none of us have a legal “property right” interest in a dime that we’ve paid in FICA taxes.  Politically, they’re nothing more than an exploitative and immoral system of intergenerational wealth transfer.  And legally, they’re nothing more than just another income tax.  For a good discussion of this issue, see Property Rights: The Hidden Issue of Social Security Reform:

“One of the most enduring myths of Social Security is that a worker has a legal right to his Social Security benefits. Many workers assume that, if they pay Social Security taxes into the system, they have some sort of legal guarantee to the system’s benefits. The truth is exactly the opposite. It has long been law that there is no legal right to Social Security. In two important cases, Helvering v. Davis and Flemming v. Nestor, the U.S. Supreme Court ruled that Social Security taxes are simply taxes and convey no property or contractual rights to Social Security benefits.”

The reason why this is true should be clear. If Social Security and Medicare had been anything other than just another pair of income taxes, the Supreme Court would have been forced to declare them unconstitutional.

I’m sympathetic to folks who feel the system “owes” them for what they’ve been forced to pay in, but only up to a point — and that includes myself. I’ve known these facts about Social Security and Medicare since my early 20s, and planned my life accordingly. My money is already gone, and I simply have to accept that. The next generation does not have an unchosen obligation to make good on my losses, which were not their fault. Aside from going after and liquidating federal assets, I don’t see any way for me to get back any of what’s been stolen from me by the twin frauds of Social Security and Medicare.

Posted in Entitlement Reform, Politics | 43 Comments