Darryl overheard this story, and then we had some difficulty finding it
without past stories strung together. This one compliments past postings
on government crime, deceit and mismanagement.
I guess the 3.3 Trillion heist from the Pentagon, announced missing
Sept. 10/01and deemed still missing due to 9/11 pandemonium, numbed US
citizens adequately. The feds know that the public is too
scared/preoccupied to pursue investigations of any officials. Now, they
can just openly steal, and they don't even need to stage another 9/11.
Natalia
US Economy 101: Stealing from Social Security to Pay for Wars and Bailouts
VDARE.COM - http://vdare.com/rob...al_security.htm
<http://vdare.com/roberts/110309_social_security.htm>
March 09, 2011
By Paul Craig Roberts
The American Empire is failing. A number of its puppet rulers are being
overthrown by popular protests, and the almighty dollar will not even
buy one Swiss franc, one Canadian dollar, or one Australian dollar.
Despite the sovereign debt problem that threatens EU members Greece,
Ireland, Spain, and Portugal, it requires $1.38 dollars to buy one euro,
a new currency that was issued at parity with the US dollar.
The US dollar's value is likely to fall further in terms of other
currencies, because nothing is being done about the US budget and trade
deficits. Obama's budget, if passed, doesn't reduce the deficit over the
next ten years by enough to cover the projected deficit in the FY 2012
budget.
Indeed, the deficits are likely to be substantially larger than
forecast. 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. 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 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.
The other great contribution to the US deficit is the offshoring of
production for US markets. 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.
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.
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 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." [CNN Transcript] 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."
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.
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.
Depending on assumptions about population growth, income growth and
other factors, Social Security continues to be in the black until after
2025 or 2035 under the "high cost" and "intermediate" assumptions and
the current payroll tax rate of 15.3% based on the revenues paid in and
the interest on those surplus revenues. Under the low cost scenario,
Social Security (OASDI) will have produced 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, amazon
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.
Paul Craig Roberts [email him] was Assistant Secretary of the Treasury
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