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. 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.