-Caveat Lector- Clinton says there "is" a surplus.. (depends what "is" is). Surplus! What surplus? There IS NO surplus. ------------------------------------------- by John Crudele, NYP THERE is no federal budget surplus. I'll say it again. There is no budget surplus. Before you even get to the issue of whether the "budget surplus" should be given back to taxpayers as the wishful Republicans suggest, or used to prop up Social Security, as the desperately- impeached President Clinton said in his State of the Union speech on Tuesday, there is a small issue that needs to be taken care of -- there really is no budget surplus. Issue No. 2. There is no way people can be allowed to invest their Social Security money in the stock market. That's because the "money" -- as in cash you, I or the government would turn over to a stockbroker -- also doesn't exist. All right, here I go again trying to explain how our elected officials in Washington are perpetrating a fraud by proclaiming that there is a budget surplus. Over the past year, the federal deficit -- which is money owed by our government -- rose from $5.486 trillion to $5.618 trillion. Those are government numbers right out of Barron's. That means the federal debt climbed by $132 billion. Which means the federal budget DEFICIT last year was $132 billion. There was no surplus of $70 billion, or any other amount, as Washington is claiming. When the economy weakens -- as it always does -- the true deficit numbers will increase. The surplus claim is wrong. It's a fraud. Washington is able to pretend there is a surplus because it has been raiding the Social Security trust fund, which, you have to understand, isn't a pile a cash sitting somewhere in the Treasury. It's really a pile of government IOUs (Treasury bills, really) Washington puts into Social Security in exchange for the cash it steals. And it is our cash that is being stolen. Anyone who pays into Social Security is really unwittingly buying IOUs from a government that might not be able to pay in decades to come. Right now the Social Security system is running a surplus because more money coming in than going out. It's demographics at work -- more employees than retirees. That pleasant situation, however, will not last long. But this surplus belongs to people like me and you, who'll need it to retire someday. So Washington shouldn't pretend that it belongs to the country and part of the budget. The president wants this non-existent "budget surplus" pumped back into Social Security. What does that mean? Washington will steal $200 billion from Social Security (turning a real $132 billion deficit into a $70 billion surplus), so that it can proclaim a budget surplus, then it will return the excess money to Social Security from where it was stolen in the first place. Oddly, that's actually a preferable charade to what the Republicans suggest. At least under the president's plan the "surplus" comes full circle and ends up back in Social Security. Under the Republican plan, you would give away the "surplus" and the money will disappear from the Social Security circle all together. The president, however, is wrong in backing a plan to allow people -- in some form or another -- to invest their money in the stock market. But the endorsement is a shrewd maneuver by a president in trouble. Bill Clinton knew back in 1992 what voters cared about -- the economy and jobs. And it is the worst kept secret in American economic history that the only thing keeping this country's marvelous economy going is the stock market bubble. It's just like Japan's wonderful economy before the bubble burst a few years back. Americans -- like the Japanese -- feel rich because of the stock market. And even though companies are laying off workers faster than they were during the hard times of the early 1990s, Wall Street is keeping people content. I estimate that President Clinton has no better than a 50-50 chance of remaining in office. Those odds go down to 60-40 against his presidency once witnesses are called before the impeachment trial (some day I'll be able to tell you why.) The president can maintain his high rating if the stock market keeps the economy rolling along. But like any other Ponzi scheme, the Wall Street bubble can't continue unless fresh money keeps coming into the market. President Clinton's Social Security proposal would provide a lot of fresh money to keep the market going, which'll keep the economy perking, which will keep Clinton's rating high. It all works quite nicely -- except that the proposal to allow people to invest their Social Security money in the market is impossible to enact. Here's why. As I said, there is no cash in Social Security. So if I am allowed to, say, put $10,000 of my Social Security money into the stock market, where is the cash going to come from? Washington doesn't have the cash. And if it does raise cash that'll be put in the market, who is going to supply the cash to pay retirees? Plus, liquidating Social Security's bonds would send interest rates skyrocketing. And when the stock market crashes, the Social Security system will be in worse shape than even the pessimists are predicting. - - - - - - - - - - - - - - - - - From: [EMAIL PROTECTED] Date: Fri, 22 Jan 1999 HUMPTY DUMPTY "Humpty Dumpty sat on a wall..." Everything is going just great. The economy is strong, the budget is balanced, and the wall on which Humpty Dumpty is perched is as solid as a rock. We have nothing to worry about. The world-wide depression has nothing to do with us. It won't happen here because the politicians will take care of everything. We have enough money so that we can have a tax cut or perhaps some new spending programs. In his most recent State of the Union address before Congress President Clinton outlined some of the spending programs he is planning so that the public will vote for Democrats. The Republicans are relying on "ye olde tax cut at election time." But there is a little problem with all of this. If the budget is really balanced, why is it that the national debt keeps growing? A computer user can easily find many places where the official debt clock keeps ticking away. As of January 11, 1999, the NATIONAL DEBT was $5,614,992,595,555.12, and that is about $20,000 dollars for every man, woman, and child in the United States. We thought that four trillion dollars was too much debt in 1992, but now the figures exceed five and one half trillion dollars, hurtling toward a predicted SIX TRILLION at the end of the century. Clinton's response to this is that "growth will take care of it". Now that word, growth, is Clintonese for inflation! Are we to pay off the national debt by inflating the currency so that the money that we have will be worth a fraction of its present value? And indeed, inflation has already carved a great big hole in individual incomes. What a fraud on the American public. Because business has been stimulated at the expense of labor we see a temporary reduction in the deficit, but not enough to even slow down the accumulation of debt! And the politicians are quarreling over how to spend it! "And Humpty Dumpty had a great fall...." Of course, the politicians will now and then admit that there is a little problem with financing Medicare and also perhaps Social Security. We hear that these programs may "go broke" in the not too distant future. Can these programs go broke without bankrupting the entire government? No, they cannot; they are just too big now, taking too large a share of the nation's income. It is like saying this about a household budget: We can balance our personal budget. All we have to do is to declare that the house payment is "off budget", and presto! everything is balanced. See how easy it is? What will happen if we do not meet the mortgage payment? An individual would be out on the street, but when it happens to an entire country the consequences are much more severe. All we need to do to understand what default means to a country is to look around the world right now at Russia, Indonesia, and other places where governments cannot meet their obligations. The depth and breath of the tragedies there have not been dealt with in the American press, but people are starving and the major part of the populations are existing on incomes well below the poverty line. POLL YOU We are being lied to. There is no budget surplus because they are playing games with the figures. Furthermore, taxpayer's money is being used to help the politicians lie to us! They poll, they find out what words will please the average voter, and that voter is getting the bill for his own deception! Why is it so difficult for them to tell the truth? The problem is that they believe that they would not be elected if they told it like it is. So, we get deeper and deeper into debt. Lie is heaped upon lie, and the world's economies crumble around us. One of these days we are not going to be able to meet the interest obligation on that huge debt. We cannot help but wonder, will what happened to Humpty Dumpty happen to us? . 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