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THE SOCIAL SECURITY MYTH

 

By Betty Freauf
September 28, 2011
NewsWithViews.com

When the question of Social Security’s constitutionality was raised before the Supreme Court in 1937, the Social Security lawyers admitted to the Court that it was not insurance but a Welfare plan, saying: “Moreover, the Act creates no contractual obligation with respect to the payment of benefits. The court has pointed out the difference between insurance, which creates vested interests, and pensions and other gratuities involving no contractual obligations. The Act cannot be said to constitute a plan for compulsory insurance within the accepted meaning of the term ‘insurance.’” Victor Simon, a District of Columbia Consumer Protection official said in a 1981 telephone interview with Gary Allen, author of “What You Should Know About Social Security” said, “Without a doubt and without hyperbole, it is the biggest ripoff in history.”[1] Where was the mainline media?

Further, so-called “trust funds” contain no cash, but only bonds – pieces of paper signed by politicians representing promises to pay in the future. The government has already spent the money taken from millions of people for Social Security. It’s gone. The promise that you will get something out of the program later when you retire relies entirely on the government’s power to tax the next generation to its knees. As Abraham Ellis explained ten years ago (1971) in The Social Security Fraud:

A DOUBLE WHAMMY

“In the government-oriented plan embodied in Social Security, the Social Security taxes are spent by the Government, an I.O.U. is substituted, and a bookkeeping entry is made as a record of the taking. The money is never repaid; it is gone forever. To add insult to injury, the suckers who ‘contributed’ the Social Security taxes in the first place, must now pay taxes to cover the interest on the I.O.U, besides providing the cash to make good on the future social Security payments as they become due.” [1]

The U.S. government is in default when those to whom the I.O.U. is owed is unpaid. You’ll notice our youthful, privileged president is trying to throw the senior citizens under the bus – borrowing from the so-called Medicare fund to bolster his Obamacare. I received an e-mail from a reader who, with tongue in cheek, said:

To save the economy, on September 28, 2011, Obama will announce that he is ordering the immigration department to start deporting old people (instead of illegals) in order to lower Social Security and Medicare costs. Old people are easier to catch, and will not remember how to get back home! “I started crying when I thought of you,” he wrote. Gotta love the sense of humor!

MORE DECEPTION

Obviously the biggest myth behind the Social Security pyramid scheme was the notion that it was an “insurance” program. This false notion was encouraged by millions of pieces of literature put out by the Social Security Administration containing misleading and false statement. Thus many people view the Social Security payroll tax as a “premium” for a government-run insurance program; they see social Security benefits as something they’ve paid for and are entitled to upon retirement. Many naively believe that their “contributions” go into a “trust fund” account with their name on it and that they will receive benefits according to their payments when they retire. Unfortunately this is not so. [1] Honest reporting by the media could have exposed this.

Since Social Security is based upon deception and fraud, you would think that someone should be prosecuted but generally with these socialist programs, by the time the fraud is discovered, the ones responsible are six feet under so whom do we prosecute? I want to believe the new crop of “Tea Party” candidates are trying to right the wrong but we are so deep in debt, we may all be on the Titanic with no lifeboats.

LANGUAGE DISTORTED

The Bible says, “No one is good, no not one.” Our Founders knew about the weakness of human nature. Build the trough and they will come. This is why they put restraints on our elected leaders with the Constitution and made certain the media was given the First Amendment.

Victor Simon in his article, “National Debt Is Four Times Bigger Than the U.S. ‘Deficit,’” appeared in the Business Section of the Los Angeles Times on January 4, 1981. Simon pointed out that the officially announced federal deficit for 1980, some $59 billion, greatly understated the true increase in federal indebtedness. Where were our elected officials?

Says Simon: “The government finished the year at least $250 billion deeper ‘in the hole’ than it began – four times the reported figure.” He explains how the federal confidence men have distorted the language so that the word “deficit” refers only to the cash deficit by which spending exceeds revenues for one Fiscal Year, but does not include debts incurred for the future. He explains that the huge debt of Social Security constitutes the major difference between the “cash” and “balance sheet” deficit. The “unfunded liability” of the Social Security systems is the amount by which future benefit commitments exceed receipts to cover them and that figure in March 1981 was estimated in current dollars to be $5.6 trillion! That was the total deficit over the next seventy-five years for Social Security alone.


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According to Victor Simon, this number is “greater than two years’ gross national product, and 175 times the $32 billion now in the pension and disability funds.” And remember that $32 billion in the “trust fund” is in the form of government bonds – not cash. If those bonds were liquidated there would not be enough money to pay out more than a few months of benefits at the present time. By 1982 (unless something is done), even this will be gone.

I recognize these numbers are old but they help illustrate why we are facing nearly a $15 trillion debt in September 2011 – when thirty years earlier the warnings went unheeded that has brought America to bankruptcy. As I’m drafting this, we are about to go into another possible government shutdown. The Democrats won’t cut spending and are now blaming the Republicans for not wanting to advance money to states with recent unprecedented weather catastrophes.

BETWEEN A ROCK AND A HARD PLACE

If the government tries to finance that debt through more taxation, it will have a workers’ revolution. If it pays the debt off in phony inflation money, as is increasingly likely, the resulting lost of purchasing power in the currency could spell destitution and permanent misery for many elderly Americans. Well, as the old saying goes, the chickens have come home to roost.

Those responsible are the politicians starting with Democrat Woodrow Wilson who helped create the unconstitutional I.R.S. and Federal Reserve. Then we leap forward to Republican Herbert Hoover who set in motion FDR’s “New Deal.” FDR was already a full-blossomed Fabian Socialist in 1932 when he was first elected president and his cabinet members were all socialists. The Democrat hypocrites called on the voters to “Throw the big Republican Spenders out” and then proceeded to expand the system even further. Democrat President Johnson had his “Great Society” with Medicare and Medicaid, Republican George W. Bush had his “Prescription Drug program,” and now we have Obamacare.

The Social Security bureaucrats lied to the American people. I explain in my 7-part series on America’s Creeping Revolution how the Fabian Socialist Planners sought to make Americans more and more dependent on government and less and less responsible for their own lives which has led to our country being bankrupt. The Fabian society has been a key ally of the communists from Lenin’s time to the present, including providing special assistance to covering up Josef Stalin’s unspeakable crimes.

Social Security differs from other pyramid schemes only in its giant proportions and the fact that unlike a chain-letter game it is a compulsory rather than a voluntary venture. You are required to pay the F.I.C.A taxes now being spent. [1]

In 2008, it is my personal opinion, voters really never voted against Senator John McCain and V.P. nominee Sarah Palin, the voters were against George Bush and now we have entered the long, drawn-out election 2012 cycle and again one party is telling the voters to throw the big spenders out!

I’m in no way at this writing supporting Texas Republican Governor Rick Perry for president but he certainly is correct when he indicates Social Security was a “Ponzi” scheme. Practically nobody understands how the system works so can I speculate that the original intent was to keep the American people in the dark and confused about the actual nature of the Social Security scheme so people would trust the politicians in Washington? However, it has taken from 1935 until much later when many elected sycophants realized but refused to do anything about it because it would mean a “death knell” the next election cycle so the lickspittles crawled back into their comfortable holes and let it come to pass. The politicians and government administrators who had arranged Social Security for the rest of us were not about to settle for a subsistence retirement so they exempted themselves.

As only one example, in 1977, under Civil Service pension fund, the federal employees contributed seven percent of their pay (compared to Social Security’s rate than of 5.85 percent) but received much better benefits. But remember, the amount paid by the worker in the private sector is matched by the employer so combining the two we get 11.7 percent; however a $15,000-a-year government employee could, after thirty years, retire at $703 per month – not bad in 1977 dollars. A worker in the private industry, on the other hand, would labor for many years longer but receive thirty-five percent less – only $460 a month. If the government retiree worked a few years under Social Security he would also get a minimum Social Security payment of $122 a month. [1]

This scam didn’t have anything to do with good sense. What about the amount of benefits one would receive depended on factors other than the amount of one’s “contributions” to the system – factors such as martial status, sex, and the amount of income one receives from other sources. For instance, a married woman is entitled to receive benefits as a dependent of her husband if he is on Social Security. But, if she has been working and contributing to the system for years, she will get no more than if she had never worked outside the home at all. [1]

And then there was in 1981 a widow with children who could not go to work without losing the benefits paid for by her deceased husband. In 2003 I knew of a woman whose husband passed away leaving her with four children. She received $900 a month for each child until age 18. A 22-year old widow with no children received only a small burial “benefit” from Social Security – and then doesn’t get another cent for forty years. Furthermore, if an otherwise eligible widow remarried, she lost her previous husband’s Social Security – which put some in the position at that time of having to choose between losing the benefits and living adulterous lives. [1]

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In 1912, President Wilson stated, “This country is no longer a Republic but is now a Democracy.” Samuel Adams said there never was a “democracy that did not commit suicide.” It seemed like the more affluent Americans became caused them not remain vigilant and like our Founders, with the exception of our military, were not willing to sacrifice our lives, our fortunes and our sacred honor so we now find ourselves in very dangerous waters. Our Founders clearly understood that only an educated citizenry in old-time traditional morality and virtue could keep us free of the chains of tyranny and because of our disobedience and lack of repentance, God has been gradually pulling twigs from our comfortable Eagle nests trying to wake us up. Our Founders recognized that men “are endowed by their creator with certain unalienable rights” and that “governments are instituted” to secure those rights; ironically, it has been that very socialist government that has eliminated these rights.

[1] What You Should Know About Social Security by Gary Allen, March 1981 American Opinion

2011 Betty Freauf - All Rights Reserved

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Betty is a former Oregon Republican party activist having served as state party secretary, county chairman, 5th congressional vice chairman and then elected chairman, and a precinct worker for many years but Betty gave up on the two-party system in 2004.

Betty is a researcher specializing in education, a freelance journalist and a regular contributor to www.NewsWithViews.com
 
E-Mail:
bettyfreauf@gmail.com


 

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If the government tries to finance that debt through more taxation, it will have a workers’ revolution. If it pays the debt off in phony inflation money, as is increasingly likely, the resulting lost of purchasing power in the currency could spell destitution and permanent misery for many elderly Americans.