Monday, May 19, 2008
In a speech given in Oregon, Obama promised that if elected he will protect The Social Security Trust Fund. A fund that does not exist, but rather is a “fund” filled with promissory notes from the government to the government. The “fund” is a misnomer for the deficit that the government has created by lumping all taxes including social security taxes into the general fund that is used to pay for the Socialist WELFARE society that our government has operated since the years of LBJ.
The Social Security system is primarily a “PAY AS YOU GO” system, meaning that payments to current retirees come from current payments into the system. In the early 1980s, the financial projections of the Social Security Administration indicated near-term revenue from payroll taxes would not be sufficient to fully fund near-term benefits, thus the Congress raised the possibility of benefit cuts. Instaed they increased the taxes taken from your paycheck for social security.
The following is an excerpt from Wikapedia: “Though widely used, the term “Social Security Trust Fund” is something of a misnomer, as the Social Security Administration of the United States actually oversees two separate funds that hold federal government debt obligations related to what are traditionally thought of as Social Security benefits. The larger of these funds is the Old-Age and Survivors Insurance (OASI) Trust Fund, which holds in trust those funds that the federal government intends to use to pay future benefits to retirees and their survivors. The second, smaller fund is the Disability Insurance (DI) Trust Fund, which holds in trust those funds that the federal government intends to use to pay benefits to those who are judged by the federal government to be disabled and incapable of productive work, as well as to their spouses and dependents.
” The securities issued under this scheme constitute the assets of the Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt. The portion of the national debt that is not considered “publicly held” represents the obligations incurred by the government to itself, the bulk of which consists of the government’s obligations to the Social Security Trust Fund”.
In 2001, Treasury Secretary Paul O’Neill upset some people by simply telling the truth. He had the temerity to say that the Social Security Trust Fund has no tangible assets. It was empty!
Knowing that the Trust Fund is a figment of our collective imagination. There’s no money, only IOUs there. It doesn’t exist, Obama has the gaul to say he will protect the “fund”!
Every cent that the American people pay in FICA payroll taxes is immediately spent. Anything left over after the current retirees are paid off goes into the general treasury where it is used, first, to make up any operating shortfall, and then to pay the government’s creditors. The Social Security Trust Fund is credited for that money in the form of nonnegotiable notes.
While speaking to a group of senior citizens in Gresham, Oregon,( a group he needs to win in November) the man who appears to be the Democratic presidential nominee raised the thorny Social Security issue. He criticized the George Bush/John McCain plan and offered one of his own.Obama wants higher earners to pay more into the system — to “protect” senior citizens “who have earned the right to retire with dignity.” “A secure retirement is no longer a guarantee for the middle class,” he said — “because Washington is not working to preserve this fundamental part of the American dream.”
Some one should tell him the President doesn’t control the budget, Congress does that. But since this is just another of his promises, we must assume that if (God forbid) he is elelected, will be just another campaign promise he fails to produce.