Looting America: It’s the End of the World As We Know It

07-20-2010 • philstockworld.com/

The 1983 payroll tax hike has generated approximately $2.5 trillion in surplus Social Security revenue which is supposed to be in the trust fund for use in paying for the retirement benefits of the baby boomers. But the trust fund is empty! It contains no real assets. As a result, the government will soon be unable to pay full benefits without a tax increase. Money can be spent or it can be saved. But you can’t do both. Absolutely none of the $2.5 trillion was saved or invested in anything. 1) President Reagan appointed Greenspan as chairman of the 1982 National Commission on Social Security Reform (aka The Greenspan Commission) 2) The Greenspan Commission recommended a major payroll tax hike to generate Social Security surpluses for the next 30 years, in order to build up a large reserve in the trust fund that could be drawn down during the years after Social Security began running deficits. 3) The 1983 Social Security amendments enacted hefty increases in the payroll tax in order to generate large future surpluses. 4) As soon as the first surpluses began to role in, in 1985, the money was put into the general revenue fund and spent on other government programs. None of the surplus was saved or invested in anything. The surplus Social Security revenue, that was paid by working Americans, was used to replace the lost revenue from Reagan’s big income tax cuts that went primarily to the rich. 5) In 1987, President Reagan nominated Greenspan as the successor to Paul Volker as chairman of the Federal Reserve Board. Greenspan continued as Fed Chairman until January 31, 2006. (One can only speculate on whether the coveted Fed Chairmanship represented, at least in part, a payback for Greenspan’s role in initiating the Social Security surplus revenue.) 6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan Commission, and one of the strongest advocates the the 1983 legislation, became outraged when he learned that first Reagan, and then President George H.W. Bush used the surplus Social Security revenue to pay for other government programs instead of saving and investing it for the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983 payroll tax hike. Moynihan’s view was that if the government could not keep its hands out of the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus Social Security revenue for the government to loot. President Bush would have no part of repealing the payroll tax hike. The “read-my-lips-no-new-taxes” president was not about to give up his huge slush fund. The practice of using every dollar of the surplus Social Security revenue for general government spending continues to this day. The 1983 payroll tax hike has generated approximately $2.5 trillion in surplus Social Security revenue which is supposed to be in the trust fund for use in paying for the retirement benefits of the baby boomers. But the trust fund is empty! It contains no real assets. As a result, the government will soon be unable to pay full benefits without a tax increase. Money can be spent or it can be saved. But you can’t do both. Absolutely none of the $2.5 trillion was saved or invested in anything.

3 Comments in Response to Looting America: It’s the End of the World As We Know It

Comment by Die Daily

Entered on: 7/21/2010 4:24:09 AM

`Trust fund` is code for `non-profit philanthropy` is code for `offshore foundation` is code for `I don`t run it but I have signed letters of resignation from every director` is code for `tax-exemption` is code for `but this is how the elites do it` is code for `I`m such an asshole`.

Comment by John Morgan

Entered on: 7/20/2010 7:22:39 PM

The trust fund is just a lie. There is no trust fund and never has been. However, your annual Social Security statement that is mailed to you continues to claim it exists and that the system is working as intended.

The other lie is that when government spends money, it is spending your tax dollars. In reality, when government needs money it borrows by selling Treasury bonds, either on the world currency market or to the Federal Reserve. All your taxes do is pay the interest on these loans. This allows governments to spend far more than they tax. The US Treasury has no treasure. It could just as easily be called the US Debtery.

Comment by Mike Chavez

Entered on: 7/20/2010 12:32:03 PM

What "Trust Fund" and why do you say "supposed to be"?

It's NOT supposed to be in a trust fund, and therefor there is NO trust fund.

FICA is just an Income tax. It can be spent by Congress any way they wish.

Grandpa's generation was WRONG.

It's time the third generation under this scam wakes up and dumps it!

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