The $1.8 Trillion Social Security Heist
Last week Federal Reserve Chairman Alan Greenspan once again sounded the alarm about Social Security. He said that benefits would have to be cut in order for Social Security to remain solvent.
Back in 1983 Greenspan successfully proposed that Social Security taxes be raised so that baby boomers would be able to collect when they reached retirement age:
Since 1983, American workers have been paying more into Social Security than it has paid out in benefits, about $1.8 trillion more, so far. This year Americans will pay about 50 percent more in Social Security taxes than the government will pay out in benefits.
Those higher taxes were imposed at the urging of Greenspan, who was chairman of a bipartisan commission that in 1983 said that one way to make sure Social Security remains solvent once the baby boomers reached retirement age was to tax them in advance.
On Greenspan’s recommendation, Social Security was converted from a pay-as-you-go system to one in which taxes are collected in advance. After Congress adopted the plan, Greenspan rose to become chairman of the Fed.
So what has happened to that $1.8 trillion? The advance payments have all been spent.
The money was spent to pay the ordinary expenses of running the federal government. Read the full story in the Seattle Times.
They didn’t just borrow millions of our retirement dollars to pay the normal expenses of government and they didn’t just borrow billions. They borrowed $1.8 trillion dollars that was stolen out of individual paychecks supposedly for retirement. Now they don’t have it and they want more or they’re going to cut the benefits. How will they pay their debt to Social Security? Higher taxes or more printing presses. Both solutions will create even more problems for the economy.
That our politicians, both liberals and conservatives are morally bankrupt is obvious to anyone who is paying attention. As I pointed out in a previous post, it is also becoming increasingly clear that our government is probably financially bankrupt as well. This PDF article, written by a prominent economist and historian, details just how bad the situation is. It is not for the faint of heart.
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