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TLC Social Security

This site was created to open frank and unrestricted discussion on all topics that the politicians are afraid to discuss or that the Party's have, through pressure on leaders, evaded. It is being done because many of us realize that the anything goes Democrat party and their Monarch in the White House have placed the country in a death spiral. Worse still our Republician Party in an effort to regain power is once againtrying to create the "big tent" that has been the root cause of or losses in recent Presidential campaigns. Moderates like McCain and Romney guaranteed defeat as they went after votes that we could not get and turned their backs on many who were our natural constituency. They are abandoning our core principles and embracing policies directed toward big donors.

 
It is our intention to remind them that most voters value principle above politics and that no topic is going to be off the table. We will discuss the issues of Social Security, Drug Legalization, National Security, Medicare, Unions, Homosexuality, Race issues, Obamacare and more. We will not approach these issues through emotion but rather examine them from an empirical perspective in concert with logical conservatism.
 
If we are to preserve our great Republic we have to create a new paradigm before the GOP follows the Democrat Party down the rabbit hole and like many great civilizations before us we become a footnote in history.
 
Our first topic will be Social Security and Medicare which are in jeopardy.  The reason is not just because of the politicians bleeding it to pay for other items but because "We the People" were complicit in that policy.   
    

 Social Security and Medicare are entitlements!! As conservatives we believe in the law of contracts. When parties enter into an agreement which involves the  exchange of currency for goods or services the party purchasing those goods or services is entitled to the item for which they paid.If a private insurance company were paid by an individual to provide a pension and disability plan, and after years of paying premiums it was time for the claimant to collect would they be able to tell the claimant that they were sorry but the money just wasn't there? Could they tell the claimant that there were IOUs from the company but that those IOUs were actually worthless? They had spent the money on other things such as pay raises, bonuses, new office buildings and advertising for more customers. Does anyone really believe that they could or should get away with an excuse like that? Of course not! Why therefore should the federal government get away with it? FICA despite claims to the contrary is not really a tax, it is an insurance premium. The letters FICA stand for the Federal Insurance Contributions Act, in other words an insurance premium.

If a private insurance company were paid by an individual to provide a pension and disability plan, and after years of paying premiums it was time for the claimant to collect would they be able to tell the claimant that they were sorry but the money just wasn't there? Could they tell the claimant that there were IOUs from the company but that those IOUs were actually worthless? They had spent the money on other things such as pay raises, bonuses, new office buildings and advertising for more customers. Does anyone really believe that they could or should get away with an excuse like that? Of course not! Why therefore should the federal government get away with it? FICA, despite claims to the contrary, is not really a tax, it is an insurance premium. The letters FICA stand for the Federal Insurance Contributions Act, in other words an insurance premium. Medicare is also paid for by a deduction from our paychecks. To repeat we are entitled to the benefit for which we paid. Among the things that are not entitlements are SSI, Medicaid, farm subsidies, oil subsidies, ethanol subsidies, corporate subsidies, corporate tax shelters, foreign aid, student loans, and the list goes on and on and on. These are the items that need to be targeted for reduction or elimination. Medicaid in fact far outstrips any fraud or abuse that might occur in Medicare and it is not paid for by the recipients.
 
The funds collected for our Social Security benefits were to be deposited in special accounts managed and safeguarded in order to provide for future benefits to the citizens and/or their dependents eligible to receive them. If this process had been followed and the money invested properly, like the politicians want us to do with 401k's, there would be no problem now.
 
Instead, starting with the Lyndon Johnson administration and continuing to the present day funds from these programs were used to fund other line items in the budget. Most recently the Democrats stole 718 billion dollars from Medicare to fund Obamacare. No Republicans in the Congress voted for that debacle. The President tried to place a positive spin on this theft with another of his now famous lies. He claimed that Obamacare's cuts to Medicare did not affect senior benefits. He even claimed that his health care law actually expanded benefits to seniors. He pointed to the fact that the new law increases Medicare spending on preventative services and prescription drugs. However, according to the Congressional Budget Office, for every $500 the law spends on preventative services and prescription drugs, it cuts Medicare by $7385. That's a cut to spending ratio of nearly 15 to 1.
 
As previously noted Social Security has been being drained over a much longer period of time. In 1960 the Supreme Court rejected the argument and established the principle that Social Security is not a contractual right. I cannot comprehend how the court could arrive at that conclusion but, shortly thereafter LBJ began the assault on the Federal Old-Age and Survivors Insurance Trust Fund.
 
By the late 1970's and early 1980's Social Security was nearly bankrupt as a program. Although various changes had been made much of the reform happened in 1983 when major changes were made to taxes and payout's. There are those changes Social Security began to run a surplus. To illustrate the dichotomy that exists within the two Parties the surplus was used during the Reagan administration to buy federal government debt.
 
The fund now holds roughly $2.5 trillion of the United States national debt. In fact Social Security is the largest lender of money to the United States government. It far exceeds the debt held by China. Ironically it holds the same financial instruments that we sell to the Chinese or any other country in the world but at a lower rate of interest. Politicians now refer to these financial instruments as worthless IOUs. If they actually worthless then why do we have to pay back the Chinese? The fact is they aren't worthless and if we owe anyone else we surely owe our own citizens first. If there is a Ponzi scheme at work here it is the Congress and the White House that is behind it!
 
There is an economic principle called the rule of 72 which states, that if you receive 7% interest for a period of 10 years you will double your principle. Those of you are old enough to remember, and those of you who are not old enough look it up, inflationary spiral that extended from the end of the Nixon administration through to the first couple of years of the Reagan administration. Interest rates for mortgages had reached almost 20% and certificates of deposit of 15% or more were not unheard of during that time. It is not difficult to understand therefore that if the geniuses in Washington had simply invested the trust fund properly or credited the prevailing interest rate to the loans that they were taking for themselves the principle would have more than doubled. We are also partly to blame. When the politicians offered to temporarily reduce our "taxes"by suspending the FICA deduction"We the People" conveniently ignored the long-term effect on the already crippled Social Security system.
 
The question is now "can it be fixed?" We believe it can and that will be the subject of our next posting. Be sure to check back. CATO 
by CATO   3/10/2014
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TLC Social Security