Obama Reveals Truth of Social Security Lies

I share your disgust for Social Security but I don't agree with the conservative talking point that "all the money's gone!" and that it's nothing but a drawer filled with IOUs.

By law, the contributed funds are not allowed to be touched. That was part of the original Social Security Act of 1935. Only the annual surpluses can be loaned out, and they must be paid back with interest - a deed that has always occurred.

Now its true that SS is a Ponzi scheme. It expects contributions to always match or exceed its payout. The exact opposite has happened. Since the reproductive rate has greatly decreased *at the very same time* as the life expectancy rate has greatly increased, the Ponzi scheme has gone belly up. Back in late 2010, SS began paying out more than it was taking in per year.

But the conservative mantra that it's all an empty lie and welfare isn't true. Monies contributed CANNOT be touched by law, and they havent' been. It's the surplus (historically, the "extra" payins not needed to cover payouts) that have been pillaged and plundered.

I've looked into the IOU claims before and only found lots of hot air - basically people quoting other people. On the opposite side, there is evidence to support the SSA's claim of their $2.5 trillion assets. Case in point - the GAO spreadsheet backs it up on.

There are two different issues here:
1) Money coming in each month, withheld from workers' paychecks, that's used to pay Social Security checks due this month. You're right, by law those are not allowed to be touched for any other purpose. That's part of the reason why Obama's threat is a lie: most of the money needed for Social Security checks will be coming in on time from workers and turned right round.

2) However, for the first time, there is not enough coming in from workers to cover the Social Security payments for that particular month. We've been dipping into the trust fund through most of the year - that is, selling the Treasury bills owned by the Social Security Administration and using that cash to make up the difference. All perfectly legal, and AS LONG AS THE TREASURY DOES NOT DEFAULT, the SSA does in fact have trillions in assets.

What Obama was trying to say is that, without raising the debt limit, he's not planning to pay off the current batch of Treasury bills, including those owned by the SSA, which would mean the SSA didn't have quite enough to pay all the Social Security checks. The point of the article is that even that is a lie: there is enough tax revenue coming in from income taxes and elsewhere for the government to fully pay all T-bill interest and more besides, ensuring that the SSA has all it needs.

Petrarch,

That's a MUCH more accurate statement than the "it's all gone!" IOUs statements but still not completely accurate as I understand it.

You're confusing money coming in *now* with money that came in and produced surpluses in years past.

Yes, it is absolutely correct that the current inflows are smaller than current outflows. Put another way - the SSA is cashflow negative. That started about a year ago.

That has nothing to do with the SSA's asset holdings however. Remember, in years past, they had surpluses each and every year (Well, almost every year except for a few years in the 80s.) For decades and decades, the surpluses racked up producing trillions in holdings.

These surpluses were loaned out for other government purposes (legally permitted by the SS Act of 1935) and they were paid back, with interest, to the SSA (also part of the 1935 Act).

Some conservatives say that those surpluses are completely gone. In other words, the "pay back with interest" part never actually happened. It was all a lie base on typical government math, using inflation numbers to call a spade a club.

That's the part I cannot substantiate. It appears to me, based on what the GAO and SSA show on their balance sheets, that those surpluses were in fact paid back and that there is now $2.5 trillion in holding. Actual real money.

Now, whether or not the SSA asset holdings is all made up of Treasury Bills in't really relevant. They had to invest the money in something. It would have been foolish to simply leave it in a big checking account not gaining any interest.

The fact that the Treasury Dept. is now having to make good on the bonds it sold to the SSA (or any other investor for that matter) is something that was always going to have to happen. Would you prefer that the government had invested it's money in banks or stocks? There would have problems from that too.

Understand - I am in no way endorsing SS. It should never have existed. All of these conflicts of interest would not have existed had citizens been made to look after their own retirement.

But I think it's a bit of stretch to suggest that it's all IOUs since the money did actually exist and was used to buy assets that also now exist. If Treasury oversold itself, that's a different issue.

I don't know of any conservatives that are saying the SSA's surpluses are "completely gone" in an accounting sense. You are absolutely correct that the SSA holds trillions in Treasury bills and government securities of various sorts. AS LONG AS THOSE ARE HONORED, they have value.

However, from the macroeconomic point of view, they have no value. Why? Because they only way they have value, is if they are repaid with tax dollars put into the general fund from other sources. They have no absolute value of their own; they have value only insofar as taxes come in to pay them.

Politicians of time past used SSA money to pay for spending they didn't want to raise taxes for. Yes, they did so entirely legally; yes, the SSA holds government securities in the appropriate amounts, so the money wasn't technically stolen. But from the societal point of view, it might as well have been, because society as a whole will still have to pony up the cash to repay it.

Let me put it another way: If the SSA had instead bought gold (say), or some other commodity that doesn't decay, then there would be absolute value. The gold (or whatever) could be sold, rendering cash which did NOT come from tax revenues.

But as it stands, economically speaking there is no difference between declaring the SSA trust fund to not exist and simply raising taxes to pay Social Security benefits, vs "honoring" the trust fund and paying back the investments from... raised taxes. The money comes from the same place either way: us the current workers. It's a scam, and always was.

Two things:
- #1: the SSA trust fund is an accident. Current workers pay directly for previous retirees. It just so happened that there was a little bit left over from time to time, which was stuffed into the trust fund. From the beginining of SS, there was never much in the trust fund. The difference came in the 70s/80s when the withholding rate was jacked from 4% to 12%. This was just another stealth tax increase that allowed the government to borrow and spend more without appearing to do so.

- #2: the money is never going to be paid back via taxes. The only possible way is via more borrowing.

"the money is never going to be paid back via taxes. The only possible way is via more borrowing."

Which, of course, is the same thing as saying that it'll never be paid back at all.

I read good sensible comments most of which should be considered by
Washington.

Of all the brilliant corporate management we have within our very
successful corporations in America, why don't we ask them to provide
guidence to Washington, which do not appear to have anyone capable
of holding meetings without losing ground or, forgetting the question.
They are an embarrassment.

I like Forbes' explanation.

http://blogs.forbes.com/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/

No, I'm sorry but that Forbes article is not a good explanation for some of the same reasons I mentioned before - it relies on speculation and then jumps to conclusions based on that speculation

Consider this:

"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"

Well, no, not necessarily.

The answer is much more simple than that - because Obama and the Dems are LYING. They are using scare tactics to gin up anger at Republicans.

The fact that Obama is now saying "I can't guarantee SS checks will go out" is not an admission that SS has no money. It's merely a sign that, once again, he's scaring seniors to get his way.

The entire Forbes article, from that point forward, relies on that speculative reasoning. This is common among conservative writers when it comes to SS.

"This is a fascinating turn of events. Every time the Republicans attempt to reform Social Security or Medicare, the Democrats thunder that those programs have billions of dollars in the bank so there's no need to steal food from the mouths of the elderly. Even the Social Security Administration says so: its most recent report claims nearly $2.5 trillion of assets."~Petrarch

What??
Don't you understand what has happened?
The SS and Medicare programs don't need to be reformed. The thieving federal government needs to keep their filthy paws out of the lockbox.
SS was illegally folded over into the general fund. They STOLE the money. Simple as that, Grand Theft.

"Social Security has been a lie and a financial fraud since Day One."
No since the day they folded it into the general fund.

I may not agree with socialism--but "fixing it" now in such a way as to just dump all of those who paid into SS into the streets is a draconian act of fascism.

Again--it is not SS that needs to be reformed, it is the criminal syndicat in DC that need to be kicked out--prosecuted for treason, and hanged.
But they have already got you in the police state pincers...now whattaya gonna do about it.

I am affraid it's too late to fall in love with Sharon Tate...
ww

I am going to say this once again--what is happening in DC is theater.
The Left/Right paradigm is synthetic. This is a dog and pony show to put everyone at each others throats, rather than grabbing the torches and pitchforks and heading to DC.

THEY ARE ALL IN ON THIS TOGETHER.

ww

The Bottom Line, what everone here needs to get here is that Socialism v Fascism {financial corporatism} is a dialectical that leads to the synthesis of NEOFEUDALISM.

That is the road we are on unless and until we put the breaks on this duplicitous system.
ww

Curious here, Willy... You mentioned "until we put the breaks on this duplicitous system" which I've never heard you say before. You talk a lot about the left/right joke, but never mention any SOLUTION to it. So what exactly do we do to fight the dialectical corporate imperialism that we all ignorantly live under? Where does the militia join, and whose house are they supposed to show up at? Do we march into Switzerland and break down the Bilderberg's door? Where do we start?

david,

Knowledge is power. What is done with said knowledge once it is grasped is up to each individual.
Until a majority, or at least a large majority grasps the concepts that define the reality they actually live within, there is nothing to stop the juggernaut.

If enough people understood, simple noncompliance would be enough to stop the system dead in its tracks.

The last thing needed is to fall into the trap of being manipulated into civil war. This may be inevitible at this point however--agent provocateurs are already all over the Internet...
ww

"If enough people understood, simple noncompliance would be enough to stop the system dead in its tracks"

Such as? What do I stop complying with? Do I no longer pay my taxes or stop at traffic lights?

EDIT:

"least a large majority" - I meant to say, least a large *minority*

ww

Keep pushing, david! Willy's been asked this question before and we have yet to get a specific answer.

But I'll not be the first to engage in the civil disobedience of ignoring traffic lights.

If you understood the imminence of the crisis, you would stop complying in every way you could think of.

A full on crash, most likely coupled with another false flag op is on the horizon.
I know this is hard to grasp, sitting comfortably in some airconditioned room taking this all in as an academic exercise, as chatroom twaddle. But the fact is the US is teetering on the edge of an abyss right along with the rest of the world.
Months? Weeks? The middle of next year?

Sooner than you expect or will be prepared for.

Doom and Gloom? Well, that is up to all to figure out and put a stop to.
I am just reporting what I know of the agenda.

ww

I don't seriously consider ignoring traffic lights 'civil disobedience'..
does anyone here see it as such?

I will not volunteer to be "leader".

My advice is limited to giving a view into the way the system actually works and where it is headed.

I believe in free choice. I just think that those choices should be well informed rather than relying on the mythology propagated by the system.

If you want to be TOLD WHAT TO DO by some leader, you aren't following what I have had to say.

Opperating this vehicle asleep is very dangerous.
Once you wake up--you will see what turns to make, when to step on the brake, etc.

I have no pretences to being a savior nor a guide. I just urge you to wake up and smell the cordite.
ww

Not looking for a leader, just for specifics beyond cop-out terms like "stop complying". "Not complying" is a wide open meaningless term - as open as 7-Eleven on Saturday night. If you have no plan of attack beyond generic anarchism, you haven't really thought it through.

Or to put it differently - how do you personally "stop complying"? I assume since you see the dialectical corporatism so clearly, you must personally have stopped complying a long time ago. So you don't pay your taxes? You don't pay for utility service? You don't answer the Census Bureau? Don't have a driver's license or SS number?

Simple question: how has Willy stopped complying?

I am not going to say publicly what I have done myself to stop complying.

It may be full spectrum, partial, or nothing as far as you are going to get any specifics.

You say you don't want a leader, and then want me to take you by the hand and show how I have done it?

The point is to grasp what the agenda truly is. At that point, you are on your own {as you are now but don't get}.

There IS no government--this is predation.
You want to be lunch? Be my guest.
ww

"You say you don't want a leader, and then want me to take you by the hand and show how I have done it?"

No, I'm asking you to simply show your details, your facts, your plan.

See, Willy, your poker face is pretty good, but when your hand is called, your cards are terrible.

You have nothing. Just admit it.

What happened is that you've gotten all hopped up on the tasty words of rabblerousers and have nothing beyond what they say. When you run out of their books and essays, the content of which also offers no plan or solution, you're lost. End of the line.

You can only bluff for so long before people ask for the cards.

That's all.

Okay David,

Just as a thought experiment:

Lets cast "Davy Jones" as an agent of say, the FBI, or IRS, who is scouting web blogs for dissenters.

He comes across the postings of one "Willie Wonka", and engages him in a converstion as if he wants to understand a system he is actually already a part of and understand intimately.

After several back and forths "Dave" starts probing for some evidenturary 'admittance'.

"Willie" being somewhat of a coyote, isn't forthcoming. So "Davy" finally lays this on him:
"No, I'm asking you to simply show your details, your facts, your plan.

See, Willie, your poker face is pretty good, but when your hand is called, your cards are terrible.

You have nothing. Just admit it."

Now, we are at the moment of truth--that being that it doesn't actually make any differnce what "Willie's" plan is, because, all he wants to do is make people aware of the overarching agenda--and has ALREADY SAID, it is up to all individuals to take their own course of action as far as attempting to blunt said agenda.

But of course, this is all hand waved by "Davy", because he has his own agenda in mind.
Now he will naturally go to the "your paranoid to think I might be an agent" routine. And 'round and 'round, all the while distracting from the central message that "Willie" has been trying to put forth.

A curious little passion play--and the names have been changed to protect the innocent. Theme music...
ww

And buy the way,

If you want facts concerning the agenda I am speaking to, I can give them to you.

If you want personal facts as to who and what I am you can go back to the office and pout.

Da?
ww

What you're saying is that it's pointless and there's nothing anyone can do.

Think about what you've said...

If the threat is real and in control to the extent you suggest, they're watching us now. Their agents are on the internet. (They ARE the internet?)

And since it's impossible for any one person to stop a threat that large, we must work together at "not complying". Yet... any attempts to associate with others and fight back would be seen and stopped instantly.

Individually we are powerless and their power makes fighting collectively futile.

You say we must fight and then you imply that we _can't_ fight because the enemy is so large and in control.

If all this is so, best to forget it and lived in the stupor of ignorance. (But that's just my FBI/CIA talking points coming through now isn't it.)

"What you're saying is that it's pointless and there's nothing anyone can do."~David

No that is what you said. I said nothing of the sort. I told you I wasn't going to tell a faceles web bot any of my personal business.
As you say, organizing as tagged individuals on the Internet is foolish and dangerous.

But there is still the real world out there.

"You say we must fight and then you imply that we _can't_ fight because the enemy is so large and in control."

I said we must disengage from supporting the system. I did not say we cannot do that because we cannot discuss exactly what we are doing as per disengagement. It takes imagination on the part of individuals themselves.

Surely as a FBI/CIA {grin} agent, you have heard of the "Leaderless Resistance"--if not lok it up on the web. Or dig up William Cooper and shoot his corpse.

"Individually we are powerless and their power makes fighting collectively futile."

Again, these are your words, and to say that I even implied them is false.
Rather I said it is up to the individual to choose his/her own path of resistance.

I am not going to let you spuriously put your words into my mouth.

Tell you what, type out your social security number with your date of birth, your last name and your mothers maiden name--then maybe we can get together and plot how to overthrow the system together.
Sound like a good idea? Aye David "Whatever" the web-jobber?

Meanwhile, you have drawn out this distraction far enough. My point is and has always been to awake from the stupor you seem to insist is your only convenient and supine answer.
ww

Meanwhile back in the barnyard of your discontent:

Obama was elected to assure continuity and accomplish by rhetorical duplicity what Republicans on their own can't do.

Notably after capitulating last December on tax cuts for America's super-rich, he proposed deep budget cuts, affecting disease prevention, children's and community healthcare, education, supplemental grants to poor women and children, community block grants for housing, energy efficiency and renewable energy, and other benefits for people most in need.

He's a charlatan, not a leader who cares. Earlier, he proposed hundreds of billions in Medicare cuts. It was step one ahead of incrementally ending entitlements and other social benefits altogether, including publicly funded pensions, returning America to dark age harshness.
Lendman/ww

Aw shucks..did I lose another "friend"?
ww

Nope.

Disambiguate.

ww

No, Willy, you haven't lost a friend.

Thanks for the reassurance Fred.

This could be true for several reasons, but I think I understand the way that you mean it.

ww

Usurper

Obama is not "a natural born Citizen," he is simply not eligible for "the Office of President" (Article II, Section 1, Clause 4). That being so, he cannot be "elected" by the voters, by the Electoral College, or by the House of Representatives (see Amendment XII). For neither the voters, nor the Electors, nor members of the House can change the constitutional requirement, even by unanimous vote inter sese (see Article V). If, nonetheless, the voters, the Electors, or the members of the House purport to "elect" Obama, he will be nothing but a usurper, because the Constitution defines him as such. And he can never become anything else, because a usurper cannot gain legitimacy if even all of the country aid, abets, accedes to, or acquiesces in his usurpation.
His purported "Oath or Affirmation" being perjured from the beginning, Obama's every subsequent act in the usurped "Office of President" will be a criminal offense under Title 18, United States Code, Section 242.
If no such true and rightful President occupies the White House, no "Bill" will or can, "before it become a Law, be presented to [him]." If no "Bill" is so presented, no "Bill" will or can become a "Law." And any purported "Law" that the usurper "approve[s]" and "sign[s]," or that Congress passes over the usurper's "Objections," will be a nullity. ~Dr. Edwin Vieira
ww

I think it is of great importance to figure out who or what Obama is, because it is a great opportunity. The system has been much too bold and blatant in this instance.
Unveiling the Obama legend would, if followed to it's proximate cause, be an unveiling of the core of the whole system.

The thing about this idea of "what to do about it"...it should be obvious to those who understand history, when people are in great hurt, they will eventually discover who is bringing that pain. So with that in mind, it is my ambition to keep the focus on who that enemy is--because it is already identified beyond reasonable doubt.

Any reasonable person who knows the details of the case against the International Banking Cartel will be able to come to see there simply is no room for "reasonable doubt." The case is almost completely prima facea from top to bottom.

Because this case is so transparent, it is only made 'invisible' by lack of propagation--which can only be maintained by a loud distraction cover story. And this is the paradigm the entire western world lives under; a Public Relations Regime, at full blast 24/7.

These are the reason that tuning it out are essential--merely for the sake of sanity it is essential.
ww

To save the confusion of the incurious who may just breeze past such things, let me explain this term, which can be explained by lawyers in such a way as to be more confusing than making it clearer. I have met many lawyers that are so hung up in legalese that they can barely speak plain English. So, to make it very simple:
“proximate cause” is the legal term for “exact cause.” “precise cause” “Approximate” means “inexact.” {the prefix “ap,” being an oppositional tag linguistically.}

An approximate point is not the exact point. An approximate point is not a precise point.

I hope any redundancy is not interpreted as arrogance—but I have encountered a lot of confusion concerning this, and other simple legal concepts quite often.
ww

That Obama is a charlatan is obvious by his actions, all of which belie his rhetoric.
Obama took the initiative to put Social Security cuts on the table, an action that went beyond the demands even of the most right-wing faction of the House Republicans, who still remember the debacle of George W. Bush’s attempt to privatize Social Security in 2005.

The principal proposal on Social Security is to recalculate benefits using what is called a “chained CPI,” an accounting formula that would sharply reduce future benefit increases using a bogus estimate of inflation that fails to take into account the much greater proportion of spending by the elderly on medical goods and services.

So any attempt by “conservatives” to portray Obama as a “socialist” is rudimentary hogwash.
Just like the ignorant 'Left' believes the scripted theater—so does the ignorant 'Right'.
ww

I am trying to get you to rip out the revetment between the right lane and the left lane so you see that both are driving the very same direction.
Once you have grasped this simple fact, you will understand the charade being played on you.

And again, for people like Dave, once a certain portion of the population see this, they are more likely to unite in common cause against this scam--whether by outward spoken consensus or any determination that it must be stopped for their own self preservation.

A problem only becomes a trouble when not addressed. In any problem, the answer is inherent in the question.
ww

Wooden shoes agree a sabot from a tree a triage for this misery.
ww

“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”~Carroll Quigley

Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), pages 324-325
ww

Well, Willie, Scragged DID say that establishing the centrla bank was one of our dumbest moves. Care to comment on:

http://www.scragged.com/articles/1913-americas-worst-year---introduction

They claim that electing senators by poular vode made it easier to manipulate them - before, they represented state governments which meant that many independent powers opposed federal growth. With them elected popularly as the progressives wanted, there was no longer a check on federal power grabs. Does what they said fit your narrative?

"They claim that electing senators by poular vode made it easier to manipulate them - before, they represented state governments which meant that many independent powers opposed federal growth. With them elected popularly as the progressives wanted, there was no longer a check on federal power grabs. Does what they said fit your narrative?"~Julia

Yes indeed it does. There is much about the Wilson Regime and 1913 that reveals the agenda. One point to the agenda was always to whittle a national government out of the constututionally federal one. And to replace the republic with a 'democracy' that could be manipulated by a Public Relations Regime. This was accomplished with the scientific pro[aganda of Edward Bernays {father of spin and who coined the term public relations} He also designed the logos of "Making the world safe for Democracy", which was the cover story for WWI. "Humanitarian Intervention" is the new Orwellian term for the same concept.
ww

Julia,

"The Law of Unintended Consequences states that there will be unintended results for every human action. It doesn't take much to see this law's effects."~Article

The fact of sinister political agenda trumps "The Law of Unintended Consequences," when all of the deep facts of the Wilson regime are taken into account.

And this is the main critique I have of the site; that this is viewed as "the Bumbling View of History"--the 'great coincidence theory' of happenstance, that just happens to have turned out according to a Banking Cabal's stated goals.

Much of what I have posted here is full of clues and leads that prove that there is nothing happenstancial about the route taken and the paradigm the world is set within today.
ww

Willy, you're saying that these guys are awfully, really, terrifingly smart. If they're really that smart, wouldn't it be simpler for them to get rich and powerful the normal way?

"wouldn't it be simpler for them to get rich and powerful the normal way?"~Ju;ia

This is "the normal way" if you take actual history into account.

"Terrifingly smart"? No,terrifingly ambitious, arrogant, and persistant.
Also Phsychotic, without empathy: Check out the term Poserism in your browser.

But beyond this, the historical record is clear on this--it is not "theory".
ww

EDIT: POLITICAL PONERISM

Look this up with your browser [SORRY]
ww

We aren't the only ones debating the President's gaffe. Here's from another discussion:

As to WSJ versus NYT editorials, here is a real genius piece from Krugman from a few years ago (referenced often in liberal blogs to prove Conservatives are scare mongers and idiots),

http://krugman.blogs.nytimes.com/2008/03/28/about-the-social-security-trust-fund/

If there is $2.6 trillion in the SS trust fund, why is Obama talking about SS recipients not getting checks if a budget deal is not reached?

http://blogs.forbes.com/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/

Now from what I understand the reason the checks would not go out is not because there is no money to pay those on SS, but because there is no money to pay the government offices doing the processing.
So all the yap about SS being broke is not the point anyway.

At anyrate. The point I am making is that this is all political theater.