"If the wealthy and corporations had paid their fair share of taxes based on all sources of
wealth income since 1970, the nation would have zero debt, the wealthy would still be very
wealthy, entitlement benefits would not be under false attack and the middle class would have been
spared much of the wealth destruction fomented on them by Wall Street and Federal Reserve policies."
A Real Social Security Lockbox
The first objective of budget reform should be to separate all Trust Funds including Social Security and Medicare Trust Funds into separate budgets, end the co-mingling of funds with the General Fund by cashing out the IOUs owed these funds so that these Trusts can be divorced from the Treasury Department’s authority and legislative budget games.
If we sever the ability of Congress and the Treasury Department to engage in misleading budget projections that blur the distinction between funded and unfunded government spending, then a clear picture of the impact of the tax avoidance entitlement and self interest politics will emerge.
Having already endured three decades of wealth redistribution from the lower classes to the upper class, the recent Obama- Democrats concession to cut entitlement benefits in the future elevates the goal of separating the nation’s Trust Funds from the General Fund into a critical mission.
Solonsays Archives
Both Political Parties are Shirking Their Fiduciary Responsibilities
to Protect the Social Security Trust Fund
The 1935 Social Security Act states: "It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States." (See Title II, Section 201of the 1935 law)
This law clearly states that the funding of current benefit outlays from the Social Security Trust Fund cannot be held hostage to any budget negotiation. Should at any time the conversion of asset reserves be needed to fund immediate benefit obligations, then any administration can raise cash from the Federal Reserve using Social Security Treasury Securities as collateral.
Since these obligations are already figured into the debt ceiling, it does not impact the debt ceiling per se, but it would elevate the amount of real interest paid on the U.S. debt.
Therefore, when any President says that Social Security recipients can be impacted by a hostile budget negotiation between parties in the Congress, he is not telling the truth and is compromising his fiduciary responsibility to the Social Security Trust Fund.
Solonsays
Overview
America's $16+ trillion dollar deficit has nothing to do with Social Security other than repaying the principal and interest owed the Social Security Trust Fund.
Both Republicans and Democrats have deliberately deceived the American public about the parabolic spending occurring in the General Fund and the finances of the nation's Trust Funds by creating a faux entitlement budget crisis placed decades into the future with hyped and fraudulent statistics.
Once separated from the authority and budget shenanigans of the U.S. Treasury and Congress, there are many innovations that can be considered to keep Social Security solvent and fully funded for another 5+ decades.
Social Security surplus funds subsidize tax cuts for
the wealthy but it is a one way street. Since the wealthy
are effectively detached from the tax code, the labor of unborn
workers is the only tax source available to pay back these loan obligations.
As the Fund's surplus revenue decreases from adverse employment trends (2010, 2011, 2012), Plutocrats are attempting to exploit this cyclical trend by demanding benefit cuts even though the fund's assets continue to grow and now exceed $2.7 trillion.
In the year 2010, the fund's surplus fund's cash flow turned negative requiring a small redemption from the General Fund. This trend has created a panic within both parties prompting President Obama to dangle a cut in the CPI calculation as an offer to Republicans like a piece of bait to catch a wild animal.
The Federal Reserve has already confiscated the interest savings that seniors once relied upon to supplement their income in order to subsidize bank profits. Now the plutocrats are opening another attack on seniors by targeting a reduction in the CPI calculation.
If politicians are going to cut Trust Fund benefits and never redeem the IOUs into legal notes when needed to pay full benefits, then the surplus taxes paid into the Trust Fund have been effectively confiscated by the plutocrats.
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email: Solon@solonsays.com