Stealing from Social Security to
Pay for Wars and Bailouts
by Dr. Paul Craig Roberts
 |
|
The elites: Lying about social security and Medicare in order to raid these trust funds to pay for wars and tax breaks for the rich |
PREFACEThe Bible calls the United States a "BEAST NATION" (Dan. 7:7); a nation that is "... DREADFUL" and "TERRIBLE," and "STRONG EXCEEDINGLY" with "great iron teeth;" one that "DEVOURS" and "BRAKES IN PIECES" the rest of the nations of the world (Daniel 7:7); and, finally, a nation that Isaiah describes as an "OVERFLOWING SCOURGE" (Is. 28:18). [For a detailed Scriptural identification of this great "Latter Day" nation, please see our article, "In Search of Babylon; What Does the Bible Say?" Please also see our article, "The Third World as a Model for the New World Order."] Secularist Paul Craig Roberts, former editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury under Ronald Reagan, clearly recognizes what the United States is, and has for many years now been desperately trying to warn average people about its mendacious machinations. One of the most misleading and immoral operations that the elites who govern the U.S. have been involved in of late has been their effort to declare that the government can no longer afford to pay into Social Security; but that is simply not true. The Social Security Trust Fund has NEVER received funds from the U.S. Treasury — and there is no reason that it ever should. Indeed, everything else being equal, it is estimated by OASDI that Social Security will still be producing surplus revenues past the year 2085 — SURPLUS REVENUES THAT ARE ESTIMATED TO BE AROUND $31.6 TRILLION (all of this surplus paid for by separate levies on the paychecks of average working people and not from taxes paid to the U.S. Treasury). The question might then be fairly asked, What are the elites really up to? — What they want to do is divert the money that is presently flowing into the Social Security Trust Fund so that this money can then be used to maintain the American New World Order System — AND THIS EFFORT HAS BECOME CRUCIALLY IMPORTANT BECAUSE OF THE GROWING REVOLT OF AVERAGE PEOPLE AROUND THE WORLD AGAINST THE EVIL MACHINATIONS OF THE AMERICAN EMPIRE. [Please see our recent article, "Confronting the Inevitable Collapse of America's Client-State System in the Middle East."]  MOREOVER, THE RECENT EARTHQUAKE (and resultant tsunami and nuclear meltdowns) IN JAPAN HAS ONLY ADDED TO THE WOES OF THE AMERICAN ELITES BECAUSE JAPAN IS THE CORNERSTONE OF THE AMERICAN EMPIRE IN THE FAR EAST; should a revolt in Japan against the American elites gain traction, the Empire would truly be left teetering on the brink — WHICH IS A TIME THAT EMPIRES THAT HAVE BEEN THREATENED LIKE THIS IN THE PAST HAVE TAKEN THEIR NATIONS TO WAR.
ALL THIS TO SAY THAT THE EMPIRE IS IN DIRE NEED OF FUNDS TO MAINTAIN ITSELF, AND A RAID ON THE SOCIAL SECURITY TRUST FUND IS ONE WAY OF GETTING THOSE FUNDS — even if it means reducing old people into penury. - Antipas |
__________________________________________
The military/security complex, about which President Eisenhower warned Americans a half century ago, is more powerful than ever and shows no inclination to halt the wars for US hegemony.
The cost of these wars is enormous. The US media, being good
servants for the government, only reports the out-of-pocket
or current cost of the wars, which is only about one-third of
the real cost. [Please see our article, "The
Mainline Media: One Enormous Propaganda Machine."]
The current cost leaves out the cost of life-long care for the wounded and maimed, the cost of life-long military pensions of those who fought in the wars, the replacement costs of the destroyed equipment, the opportunity cost of the resources wasted in war, and other costs. The true cost of America's illegal Iraq invasion, which was based entirely on lies, fabrications and deceptions, is at least $3,000 billion ($3 trillion) according to economist Joseph Stiglitz and budget expert Linda Bilmes. The same for the Afghan war, which is ongoing. If the Afghan war lasts as long as the Pentagon says it needs to, the cost will be a multiple of the cost of the Iraq war.
There is not enough non-military discretionary spending in the budget to cover the cost of the wars even if every dollar is cut. As long as the $1,200 billion ($1.2 trillion) annual budget for the military/security complex is off limits, nothing can be done about the U.S. budget deficit except to renege on obligations to the elderly, confiscate private assets, or print enough money to inflate away all debts. [Please see our article, "Preparing the Ground in America for the Emergence of Antichrist."]
The other great contribution to the US deficit is the offshoring of production for US markets. [Please see our article, "Jobs Flying Faster from the U.S."]
This practice has enriched corporate management, large shareholders, and Wall Street, but it has eroded the tax base, and thereby tax collections, of local, state, and federal government, halted the growth of real income for everyone but the rich, and disrupted the lives of those Americans whose jobs were sent abroad. When short-term and long-term discouraged workers are added to the U.3 measure of unemployment, the U.S. has an unemployment rate of 22%. A country with more than one-fourth of its work force unemployed has a shrunken tax base and feeble consumer purchasing power. [Please see our article, "A Permanent 30% Unemployment Rate."]
NOTE: Here Roberts pinpoints the mendacity of America's elites. It begins (1) with the elites insatiable appetite to enrich themselves by offshoring production for US markets and pocketing the difference between what they would have paid to US workers and what they actually paid to foreign workers in low-wage off-shore facilities that approximate the conditions workers faced in 19th Century workshops in England, and it ends with (2) the necessity for these same American elites to maintain a huge military to guard against revolt by these workers — a military that is increasingly stripping away the livelihoods of average American citizens in order to provide the necessary funds to maintain it. For an idea of the mindset that drives the rich, please see our article, "The Elite, Money and the End of Days."] |
To put it bluntly, the $3 trillion cost of the Iraq war, as computed by Joseph Stiglitz and Linda Bilmes, is 20% of the size of the U.S. economy in 2010. In other words, the Iraq war alone cost Americans one-fifth of the year's gross domestic product.
Instead of investing the resources, which would have produced income and jobs growth and solvency for state and local governments, the US government wasted the equivalent of 20% of the production of the economy in 2010 in blowing up infrastructure and people in foreign lands. The US government spent a huge sum of money committing war crimes, while millions of Americans were thrown out of their jobs and foreclosed out of their homes. [Please see our articles, "Working Two Jobs and Still Underemployed" and "2010 Sets US Home Foreclosure Record."]
 |
|
The US government has wasted the equivalent of 20% of the production of the economy in 2010 blowing up infrastructure and people in foreign lands. |
The bought-and-paid-for Congress had no qualms about unlimited funding for war, but used the resulting "debt crisis" to refuse help to American citizens who were out of work and out of their homes.
 |
|
The U.S. military has become nothing more than the handmaiden of the rich; its purpose is not to defend average Americans, but to enforce the will of corporate America on the poor of the world. |
The obvious conclusion is that "our" government does not represent us.
The US government remains a champion of offshoring, which it calls "globalism." According to the US government and its shills among "free market" economists, destroying American manufacturing and the tax bases of cities, states, and the federal government by moving US jobs and GDP offshore is "good for the economy." It is "free trade."
It is the same sort of "good" that the US government brings to Iraq and Afghanistan by invading those countries and destroying lives, homes and infrastructures. Destruction is good. That's the way our government and its shills see things. In America destruction is done with jobs offshoring, financial deregulation, and fraudulent financial instruments. In Iraq and Afghanistan (and now Pakistan) is it done with bombs and drones.
Where is all this leading?
It is leading to the destruction of Social Security and Medicare.
Republicans have convinced a large percentage of voters that America is in trouble, not because it wastes 20% of the annual budget on wars of aggression and Homeland Security porn-scanners, but because of the poor and retirees.
Pundits scapegoat the middle class and blame the struggling middle along with the poor and retirees. Fareed Zakaria, for example, sees no extravagance in a trillion dollar military budget. The real money, he says, is in programs for the middle class, and the middle class "will immediately punish any [politician] who proposes spending cuts in any middle class program." What does Zakaria think the military/security complex will do to any politician who cuts the military budget? As a well-paid shill he had rather not say.
Andrew Sullivan also has no concept of reductions in military/security subsidies: "they're big babies I mean, people keep saying they don't want any tax increases, but they don't want to have their Medicare cut, they don't want to have their Medicaid [cut] or they don't want to have their Social Security touched one inch. Well, it's about time someone tells them, you can't have it, baby."
|
||
| Fareed
Zakaria and Andrew Sullivan: |
Niall Ferguson thinks that Americans are so addicted to wars that the U.S. government will default on Social Security and Medicare.
Republicans tell us that our grandchildren are being saddled with impossible debt burdens because of handouts to retirees and the poor. $3 trillion wars are necessary and have nothing to do with the growth of the public debt. The public debt is due to unnecessary "welfare" that workers paid for with a 15% payroll tax.
When you hear a Republican sneer "entitlement," he or she is referring to Social Security and Medicare, for which people have paid 15% of their wages for their working lifetime. But when a Republican sneers, he or she is saying "welfare." To the distorted mind of a Republican, Social Security and Medicare are undeserved welfare payments to people who over-consumed for a lifetime and did not save for their old age needs.
America can be strong again once we get rid of these welfare leeches.
 |
|
THE
LARGELY FICTIONAL WELFARE QUEEN According to Republicans, Social Security is an “unfunded liability;” but according to the official 2010 Social Security reports, between 1984 and 2009 the American people contributed $2 trillion, that is $2,000 billion ($2 TRILLION), more to Social Security and Medicare in payroll taxes than was paid out in benefits. |
Once we are rid of these leeches, we can really fight wars. And show people who is boss.
Republicans regard Social Security as an "unfunded liability," that is, a giveaway that is interfering with our war-making ability.
Alas, Social Security is an unfunded liability, because all the money working people put into it was stolen by Republicans and Democrats in order to pay for wars and bailouts for mega-rich bankers like Goldman Sachs.
What I am about to tell you might come as a shock, but it is the absolute truth, which you can verify for yourself by going online to the government's annual OASDI and HI reports. According to the official 2010 Social Security reports, between 1984 and 2009 the American people contributed $2 trillion, that is $2,000 billion, more to Social Security and Medicare in payroll taxes than was paid out in benefits.
What happened to the surplus $2,000 billion, or $2,000,000,000,000.
The government spent it.
Over the past quarter century, $2 trillion in Social Security and Medicare revenues have been used to finance wars and pork-barrel projects of the US government.
It is estimated that Social Security (OASDI) will produce surplus revenues of $31.6 trillion by 2085.
When I was Assistant Secretary of the US Treasury, Deputy Assistant Secretary Steve Entin worked out a way to put Social Security on a sound basis with the current rate of payroll tax without requiring one cent of general revenues. You can read about it in chapter 9 of my book, The Supply-Side Revolution, which Harvard University Press has kept in print for more than a quarter century. Entin's solution, or a variation of it, would still work, so Social Security can easily be saved within the current payroll tax rate. Instead of acknowledging this incontrovertible fact, the right-wing wants to terminate the program.
Treasury was blocked from putting Entin's plan into effect by the fact that other parts of the government and the Greenspan Social Security Commission had agendas different from ensuring a sound Social Security system.
Wall Street insisted that the Reagan tax rate reductions would explode consumer spending, cause inflation and destroy the values of stock and bond portfolios. When inflation collapsed instead of exploding, Wall Street said that the deficits, which resulted from inflation's collapse, would cause inflation and destroy the values of stock and bond portfolios. This didn't happen either.
Nevertheless, the Greenspan commission played to these mistaken fears. The "Reagan deficits" could not cause inflation, because they were the result of the unanticipated collapse of inflation (anticipated only by supply-side economists). As I demonstrated in a paper published in the 1980s in the US, UK, Japan, Germany, Italy, and other countries, tax revenues were below the forecast amounts because inflation, and thus nominal GNP, were below forecast. The collapse of inflation also made real government spending higher than intended as the spending figures in the five-year budget were based on higher inflation than was realized.
The subsidy to the US government from the payroll tax is larger than the $2 trillion in excess revenue collections over payouts. The subsidy of the Social Security payroll tax to the government also includes the fact that $2.8 trillion of US government debt obligations are not in the market. If the national debt held by the public were $2.8 trillion larger, so would be the debt service costs and most likely also the interest rate.
The money left over for war would be even smaller. More would have to be borrowed or printed.
The difference between the $2 trillion in excess Social Security revenues and the $2.8 trillion figure is the $0.8 trillion that is the accumulated interest over the years on the mounting $2 trillion in debt, if the Treasury had had to issue bonds, instead of non-marketable IOUs, to the Social Security Trust Fund. When the budget is in deficit, the Treasury pays interest by issuing new bonds in the amount of the interest due. In other words, the interest on the debt adds to the debt outstanding.
The robbed Social Security Trust Fund can only be made good by the US Treasury issuing another $2.8 trillion in US government debt to pay off its IOUs to the fund.
When a government is faced with a $14 trillion public debt growing by trillion dollar deficits as far as the eye can see, how does it add another $2.8 trillion to the mix?
Only with great difficulty.
Therefore, to avoid repaying the $2.8 trillion that the government has stolen for its wars and bailouts for mega-rich bankers, the right-wing has selected entitlements as the sacrificial lamb.
A government that runs a deficit too large to finance by borrowing will print money as long as it can. When the printing press begins to push up inflation and push down the exchange value of the dollar, the government will be tempted to reduce its debt by reneging on entitlements or by confiscating private assets such as pension funds. When it has confiscated private assets and reneged on public obligations, nothing is left but the printing press.
We owe the end-time situation that we face to open-ended wars and to an unregulated financial system concentrated in a few hands that produces financial crises by leveraging debt to irresponsible levels.
The government of the United States does not represent the American people. It represents the oligarchs. The way campaign finance and elections are structured, the American people cannot take back their government by voting. A once proud and free people have been reduced to serfdom.
 |
|
Naïve Christians who have been persuaded to support the American New World Order System. [Please see our article, "Crossing the Rubicon."] |