Congressionally Duped Americans


imagesLast week’s column, “Is There a Way Out?”, generated quite a few responses, some a bit angry. Some people were offended by my reference to Social Security and Medicare as entitlements or handouts. They said that they worked for 45 years and paid into Social Security and Medicare and how dare I refer to the money they now receive as an entitlement. These people have been duped by Congress and shouldn’t be held totally accountable for such a belief. Let’s examine the plethora of congressional Social Security lies. I’ll leave the Medicare lies for another column.

The Social Security pamphlet of 1936 read, “Beginning November 24, 1936, the United States Government will set up a Social Security account for you. … The checks will come to you as a right” (http://tinyurl.com/maskyul). Therefore, Americans have been led to believe that Social Security is like a retirement account and money placed in it is their property. The fact of the matter belies that belief.

A year after the Social Security Act’s passage, it was challenged in the U.S. Supreme Court, in Helvering v. Davis. The court held that Social Security is not an insurance program, saying, “The proceeds of both employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.” In a 1960 case, Flemming v. Nestor, the Supreme Court held, “To engraft upon the Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands.”

Decades after Americans had been duped into thinking that the money taken from them was theirs, the Social Security Administration belatedly — and very quietly — tried to clean up its history of deception. Its website explains, “Entitlement to Social Security benefits is not (a) contractual right.” It adds: “There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense.

… Congress clearly had no such limitation in mind when crafting the law” (http://tinyurl.com/49p8fl2). The Social Security Administration failed to mention that it was the SSA itself, along with Congress, that created the lie that “the checks will come to you as a right.”

Here’s my question to those who protest that their Social Security checks are not an entitlement or handouts: Seeing as Congress has not “set up a Social Security account for you” containing your Social Security and Medicare “contributions,” where does the money you receive come from? I promise you it’s neither Santa Claus nor the tooth fairy. The only way Congress can send checks to Social Security and Medicare recipients is to take the earnings of a person currently in the workforce. The way Congress conceals its Ponzi scheme is to dupe Social Security and Medicare recipients into thinking that it’s their money that is put away and invested. Therefore, Social Security recipients want their monthly check and are oblivious about who has to pay and the pending economic calamity that awaits future generations because of the federal government’s $100 trillion-plus unfunded liability, of which Social Security and Medicare are the major parts.

Pointing to the congressional lies and future economic chaos is not the same as calling for a cessation of checks going out to recipients. Instead, it’s a call for the recognition that we’ve made a mistake that needs to be corrected while there’s time to avoid a calamity. It’s also a call for us to recognize that we all share in the blame and hence the burden to make it right. Politicians have little interest in doing something about an economic calamity that will happen in 2030 or 2040; they only care about the next election. Older Americans, who own most of the political clout, must lead the fight to get Congress to do something about entitlement programs. Of course, the alternative is continued belief in the Social Security and Medicare myth and the heck with future generations.

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  • objectivefactsmatter

    How about Ponzi scheme?

    • The March Hare

      From the article: “The way Congress conceals its Ponzi scheme is to dupe Social Security and Medicare recipients into thinking that it’s their money that is put away and invested.”

      • objectivefactsmatter

        I must have skimmed too fast.

  • http://fdnyretiree.com/ Ed FDNYRetiree

    NONSENSE!

    Social Security is in trouble NOT for the reasons the author gives.

    Social Security is in trouble because CONGRESS STOLE THE MONEY and mixed the TRUST FUND with general funds so it could distribute the billions of dollars that made the fund solvent to lowlife, leeching scumbags.

    As usual, for votes.

    CONGRESS DID THAT!

    This kind of crap is regurgitated again and again, and it is false.

    If Congress had not touched the money and allowed it to be put into an interest bearing account instead of spending it as Congress (including Republicans like Bush) loves to do, this article would be truly laughable.

    Instead it is sad, because our Congress — not those on Social Security — is destroying America.

    • BillG4

      Then you agree that SS is in trouble. Labeling your post as ‘Nonsense’ is misleading. SS is going down the tubes without change. Your post simply argues who is responsible. I agree that Congress is to blame, but the question remains: what is to be done to mitigate a bad situation? It’s definitely a Ponzi scheme and withdrawals are being made faster than new deposits.

      This article asks what is to be done to avoid a collapse? It’s a real question that will be answered by overt action on our part or fiscal bankruptcy. If you’re already on SS, as I, then you need to accept that a reduction in benefits is coming, one way or the other.

      • john spielman

        It wasn’t JUST congress, but all the US presidents (including republicans) who approved and allowed it to go on. My father told me over 40 years ago that SS was smoke and mirror show and that all SS premiums went into the general fund and spent on social programs (remember Lyndon Johnsons’s “GREAT SOCIETY” where poverty was supposed to be eliminated by massive federal spending?)

  • JEANNIEMAC2

    The Social Security Fund was originally set up as a trust, to be invested in bank accounts, safe from the variables of the stock market. Lyndon Johnson transferred the money in the SS fund to the General fund, to finance the Vietnam War. The money was replaced in the SS fund with pieces of paper (bonds). Every since, Social Security taxes are placed into the general fund, spent by the government for general expenses, aid to other countries, perks, etc.

    Retirees are sent their monthly payments from the money collected from currently employed people. What is left after those payments are made goes into the general fund, and the SS fund gets more pieces of paper.

    There is no money in the Social Security Fund. It is broke.

  • JEANNIEMAC2

    http://taitzreport.com/
    Orly Taitz gave copies of her evidence regarding Os forged and fraudulent documents, to a Congressman, who is going to distribute them to colleagues.
    She asks that we all send copies of her letter and evidence to our Congress person and everyone we know. A hearing is to be held on immigration, e-verify, etc. She wants her evidence placed into the record.

    This may be our last chance. The battle is on.

  • Donald J DaCosta

    “Therefore, Social Security recipients want their monthly check and are oblivious about who has to pay and the pending economic calamity that awaits future generations….”

    Certainly not true for some unknown percentage of those recipients but what are they now to do at a time for most when gainful employment is little more than a cherished but no longer viable experience. While age discrimination in this politically correct world is illegal it is nevertheless an unavoidable fact. Who is going to hire a 70 year old truck driver, sanitation worker, carpenter, bank teller, etc., etc. when there are much younger, healthier, more vigorous, more motivated and perhaps more qualified individuals, eager to support a young family and clamoring for the same income producing opportunities.

    The fact that the Congress refuses to address this issue in any meaningful way is largely their fear of retribution at the ballot box. This is because the Congress has no idea how to fix this problem of their own making without inflicting disastrous consequences on the growing population of senior citizens that are
    now or will soon be in the system; seniors that are among the most active participants in elections.

    To date it seems that no one has come up with a solution that will be painless for all, seniors already collecting their checks and all those down the age spectrum who will be effected in one way or another. Compound this with the fact that corporate America has been so demonized by the highly publicized cases of the fraudulent handling and squandering of employee retirement funds and the media generated an constantly reinforced mistrust and scepticism aimed at corporate America in general, “the epitome of evil,” that any suggestion of “privatization” of the social security system is met with extreme scepticism and virulent resistance. It’s referred to as “the third rail” in politics; political suicide.

    The extreme irony here is that the government run system is a Ponzi scheme, one of the more egregious acts of financial fraud in the annals of related crimes. Bernie Madoff is currently serving a life in prison sentence for a crime the government imposes a sentence on itself of defacto immunity. Couple this with the fact that there are literally hundreds if not thousands of private
    investment vehicles available, (Here are a list of 114:
    http://www3.troweprice.com/fb2/mfpathways/pathways.otc) that come under the ERISA (Employee Retirement Income Security Act) umbrella intended to
    protect investors, future retirees, from the very abuse perpetrated by the US Government that seniors seem to be convinced is their Knight in shining armor. How is this possible? Apparently because seniors are too indoctrinated, too lazy, too ignorant, too old and too determined not to listen to any proposal related to “privitization” though any such approach would likely be structured so as to have no effect whatsoever on their retirement prospects.

    This is not to imply that privatization will be a simple, one size fits all, straightforward solution. On the contrary. Nevertheless, despite some initial problems in the early years, once those recede with the passage of time and the Government is reduced to perhaps providing catastrophic retirement insurance only, using revenues from the general fund (where FICA contributions go now) the Social Security funding dilemma will be resolved.

    One thing is for certain. Beating up on old folks implying they are non
    conributing beneficiaries of undeserved entitlements will do nothing except reinforce the resentment felt by the youth who are paying an ever increasing percentage of their payroll FICA deductions to pay for said “entitlement.”

    A brief note on private funds. The so called “defined benefit plans” payout a
    fixed monthly retirement benefit over the lifetime of the recipient with no contribution whatsoever from the taxpayers, instead relying on the dividends, interest and capital gains from actively managed investment portfolios.

  • USARetired

    And now some low life’s in our government are attempting to change the name of Social Security to some Federal benefit program, which apparently is already on the actual checks in place of Social Security. But how would we know, who see’s a check?

  • guy r west

    I Can rember years back when it was in the news that congress Barrowed money from the social secularity fund for other programs other government programs that were in trouble But of cores one never herd it had been replayed just that they kept barrowing for social security fund they took and never payed it back millons at a time so of corse its in troube they should have been forced to pay back what they took. but don’t hold your breath its not going to happen and people knew this way back then as well. the government giveith and it takeeth away But now part of the government is trying to take more than our money there trying to take our freedoms our constitutional rights and 0r religious rights and freedom as well. onece the government takes something or barrows it eatyer way you don’t get it back

  • HanaFiveO

    Social Security without a doubt has been the biggest ponzi/pyramid scheme of all time, second to Al Gore’s “Global Warming;” and it would even make Bernie Madoff blush. Past/present Presidencies and Congresses extorted our hard earned monies from our paychecks, in reality, and are all to blame for the loss of these funds that we were coerced to invest; over one hundred Trillion dollars of unfunded liabilities is in the wind; gone, poof.

    I guarantee it wasn’t the “Baby Boomers” fault.!

    Again, one big whopper of a lie; much like Hitler’s description of the big lie in his book Mein Kampf back in the 1920’s. If the lie was a small one people wouldn’t believe it. What’s interesting, both Democrat and Republican politicians continue today to use Hitler’s theory; can you say ObamaCare.?

    Since President Johnson’s Progressive (Socialism) utopian ideology, “the Great Society” and with the help of his super majority, Democrat/Progressive, in Congress passed the Social Security Act of 1965 our funds were doomed. The Act allowed Congress and Presidents access to our secured funds to use at their whim; fund unrelated pork projects or even balance Federal Budgets (thanks Clanton/Gingrich).

    Yup, and you wondered how Clanton and Gingrich came up with a surplus?

    What made Social Security even more doomed was when Congress moved our two alleged “secured” trust accounts to the general fund. Yes, back in 1968 our Social Security funds became a line item with-in the Federal Budget.

    So, don’t hold your breath with Social Security, it’s gone. There isn’t enough money on the PLANET to refund it. Too bad we can’t put the 535 past and present in prison for the theft of our funds.