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    Indirectly - Obama and The NYTimes admit Social Security is a Ponzi Fraud

    04/09/2013
    Democracy and Power 103: Government Money

    In general, the art of government consists in taking as much money as possible from one part of the citizens to give to the other. —Voltaire (1764)

    Indirectly  - Obama and The NYTimes admit Social Security is a Ponzi Fraud

    Through intended “leaks,” President Obama will propose a change in calculating the cost-of-living increases for Social Security, which will result in beneficiaries receiving less money than the current system. The President's faithful supporters are horrified that the President would take money from retirees.  Union leaders, Moveon.com, and the Senate's only socialist – Bernie Sanders – are adamantly opposed.  Why would the President “tweak” Social Security, and irritate his political base and gigantic voting block – seniors?

    The President knows – as should every member of the Senate and House – that Social Security and  Medicare are spending more money than the Social Security and Medicare tax revenues bring in.  These two programs and Medicaid (health care for the poor) are sucking gigantic sums of money out of the Federal treasury and will continue to consume more and more.  So, the President is seeking a trade with Republicans – a small tweak to Social Security in exchange for a lot of tax increases.

    It's a terrible trade; especially for young Americans.  If Congress and the President make a “deal,” Social Security, Medicare and Medicaid will continue to expand – especially Medicaid under ObamaCare - and taxes will be greatly increased.  Paul Krugman recently reported that in order to maintain these programs, a Value Added Tax (VAT) must be imposed.  A VAT is a form of sales tax, which will tax everyone in addition to our current taxes.  [Read:  America Beware of More Stealth Tax Increases]

    Most revealing - indirectly, President Obama is admitting that Social Security and Medicare are Ponzi frauds.  As The New York Times recently stated “... Social Security has always been a pay-as-you-go system, with workers’ taxes going not to some actual trust fund for them but directly toward benefits for retirees.”

    Jackie Calmes, of The New York Times, laments that the public – especially seniors – mistakenly believe they have paid for their Social Security and Medicare benefits.  In an article titled  Misperceptions of Benefits Make Trimming Them Harder, she reports that for the last six years Medicare has sucked over 45% of its payment from the Federal treasury.  So, besides paying the 15.3% Social Security and Medicaid tax, every taxpayer is also paying for the short-fall in Social Security and Medicare benefit payments.  YIKES!

    Needless- to-say, America has a debilitating and perilous debt problem.  The President and Calmes acknowledge – indirectly – that Social Security and Medicare must be substantially changed.  

    This is important.  For major political change to occur, Americans must understand the problem.  The problem with Social Security and Medicare is that “workers’ taxes going not to some actual trust fund for them but directly toward benefits for retirees.” 

    Worse, Social Security and Medicare are sucking gigantic sums from the Federal treasury and will continue to consume more and more.  These indirect admissions are a  rebuke of Pelosi's claims eight years ago that Social Security was solvent until 2042, and should stop politicians from claiming Social Security and Medicare are not part of America's deficit and debt debacle.

    When Americans understand the debt problem, then serious discussions on resolutions will ensue.  

    1 comments
    Monk Mann
    04/22/2013

    It's actually a scheme that the rest of the economy relies on to maintain a middle class lifestyle.

    This is probably why most will never understand "the debt problem," as an economy that uses the reserve currency will have no choice but to maintain economic "growth" by constant borrowing and spending.

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