by John Koraska

March 12, 2005

 

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This article does not question the merits of the Social Security program. It is the most popular social program in the country and enjoys overwhelming majority support. This addresses some of the injustices in the program that have evolved since its inception and how to insure its sustainability for future generations.

 

The law requires that social security incomes taxes can only be spent on Social Security. The government circumvents the law by spending the surplus cash and earned interest each year and depositing IOUs in the TRUST (SLUSH) fund. There is no intention of redeeming the IOUs. It is perpetual debt, UNLESS THE LAW is changed, authorizing Trust fund investment in a broad arena of savings and investment alternatives.

 

In their 2004 annual report the Social Security Actuaries projected that the combined OASI and DI Trust (SLUSH FUND DEBT) funds would grow from $1.531 trillion in the beginning of 2004 (306 percent of annual expenditures), to $3.584 trillion at the beginning of 2013 (442 percent of annual expenditures) in that year. The projected growth of $2.053 trillion in the next 8 years can be spent on anything the government wants and puts an additional $2.053 trillion more IOUs in the ?SLUSH' fund, OR they can change the law.

 

If the law were changed today, CURRENT IOUs would be redeemed. By 2013 a REAL TRUST fund would have REAL ASSETS of over $2 TRILLION and with the MAGIC of COMPOUNDING would likely CANCEL the need to raise taxes, cut benefits or increase the retirement age. REAL ASSETS (cash surplus and cash earnings) invested in the private sector will invigorate the economy, and restrain government spending. Government will not STOP this "SCAM" unless irate citizens DEMAND it. Write, call or Email your representatives.

 

"A policy, an economy, a society or a country erected on a foundation of injustice is destined to fail."  -- John Koraska March 6, 2005

 

MAGIC OF Compounding Interest

 

The President speaks of the "magic of compounding" when seeking support for his Private Retirement Accounts. It's amazing that no one has asked him WHY he doesn't apply this same principle to the TRUST FUNDS?  Compound DEBT or COMPOUND ASSETS? It's not a loaded or a complicated question. If you ran you family or business like this you'd be bankrupt in a heartbeat! What makes the government believe it is immune to the laws of mathematics?

 

Just last month the President went around making speeches that the TRUST FUNDS were just IOUs. He stated clearly the money has already been spent. What he did not say is they are still doing it and have no intention of stopping. I do not understand WHY He and the CONGRESS will not STOP misappropriating the money intended for FUTURE BENEFITS?? Perhaps they have something to hide, like explaining FICA tax shortfalls resulting from business expense deductions.

 

Social Security Ratios

 

The President often speaks of the ratio of workers to Social Security beneficiaries, currently 3.3/1, according to him and 3.25/1 according to Alan Greenspan. They both say it is headed toward to 2/1. That's interesting; but doesn't solve any problems. They are only used to emphasizing a problem, a problem that could be solved if the real issue was confronted. 

 

Here's another ratio that he might consider telling his audience. It takes the Social Security contributions of 17.5 minimum wage workers (2080 hrs * $5.15 * 12.4% = $1328.00) to provide free benefits to one non-contributing wealthy survivor receiving the maximum benefit of $23268. (2005). It requires 26.6 minimum wage workers to provide the maximum benefits of $35262.00 for a couple (retired worker ($23268) and ($11634) for his non-contributing spouse). Retired couples receiving the maximum benefits get over three times the gross wage of a minimum wage worker contributing to their heavily subsidized support.  IS THIS SOCIAL SECURITY, WELFARE, FRAUD, (legalized) THEFT, or ALL the above?

 

A system created to provide a modest retirement safety net for the poorest workers in the country has evolved into the poorest workers in the country having their modest incomes taxed to provide benefits that are higher than the worker ever expects to earn.

 

"Theft whether conducted by a thief on a moonless night or accomplished by lawmakers in cloaked rooms, acting with a mandate of law, is still theft." -- John Koraska, March 10, 2005

 

Greenspan the Fox

 

Congress and The president's panel on tax reform asking Alan Greenspan to lay out the facts is like asking a blind man which way is east, or asking the fox to stop killing chickens. Mr. Greenspan is the architect of Social Security reform in the early 1980's.

Mr. Greenspan is the most powerful Banker in the World. Why doesn't some Congressman ask him, "Is compounding debt in a slush fund, better than compounding assets in a real Trust Fund?" If they can understand his answer, which may be "It's against the Law." The next question would be: "Why didn't you recommend changing the law back in 1983?" Had he done so, Social Security would currently be enjoying substantial financial growth and the politicians would be arguing with each other on how to spend the profits instead of how to pay for the debt.

 

"The opinion of 10,000 men is of no value if none of them know anything about the subject." -- Marcus Aurelius

 

Social Security Welfare or Fraud (Art#10)