Cuts in Social Security, Confiscation, or Wealth Redistribution?

The Governor of New Jersey, Chris Christie, gave a speech on Tuesday, April 14, 2015, in which he proposed, among other things, raising the retirement age from 67 to 69. He stated that, “We should remember that Social Security at its core should be retirement insurance. I’m suggesting that Americans pay into the system throughout the course of their life, knowing that it will be there, if they need it, to support them in their later years, so seniors will not grow old in back-breaking poverty. But, if you are fortunate enough not to need it, you will have paid into a system that will continue to help Americans, neighbors, friends, who need it the most…. It is fair, and it is what we must continue to do. We can only do that by changing Social Security.” http://www.wsj.com/articles/christie-to-call-for-raising-age-for-social-security-cutting-benefit-for-some-seniors-1429018212

According to our government’s website, “The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940.” It is important to note that it is a TAX, not an insurance premium, and it is not an insurance program.

Is this a communistic issue of “fairness” or is it an issue of out-of-control welfare and government spending? Perhaps we should remind the governor that the Social Security Act of 1935 was just a retirement program that only paid benefits to the primary worker. According to their website, “a 1939 change in the law added survivors’ benefits and benefits for the retiree’s spouse and children. In 1956 disability benefits were added….The original law contained the first national unemployment compensation program, aid to states for various health and welfare programs, and the Aid to Dependent Children program.”

My question to Governor Christie would be, before we start talking confiscation of retirement benefits, shouldn’t the law be changed by legal venues? When did Social Security suddenly become an optional insurance program for which we can select to pay premiums or opt-out? As a matter of fact, Social Security is mandatory, people are forced by law to contribute into Social Security 6.2 percent and employers also contribute 6.2 percent per employee. Furthermore, Social Security benefits are taxed again. The premise of FDR’s law was that, if nanny government did not step in, Americans were too stupid or apathetic to invest their own money to help them survive in old age. http://www.ssa.gov/history/hfaq.html

And who decides which Americans need it the most and what is the criteria? How far of a stretch will be before the smart government bureaucrats like Christie decide that your savings in the bank are not really useful to you, you must give them up to the needier and unfortunate who have made bad choices in life and wound up poor, downtrodden, and addicted to drugs. Taking it a bit further, how much of a stretch is it for the same omnipotent government to step in and decide for you that your home has too many empty bedrooms, or too much space and thus must be confiscated and occupied by poor illegal aliens who have lots of kids and are in need of space. After all, in the Marxist ideology, it is only fair and social justice to confiscate wealth and other people’s money and possessions in order to give to the community and especially to the communist party elites and apparatchiks. It has certainly happened in all the former Iron Curtain countries where everybody lost everything they owned to government confiscation, redistribution, and social engineering.

Governor Christie continued, “So, let’s ask ourselves the question, do we really believe that the wealthiest Americans need to take from younger, hard-working Americans, to receive what, for most of them, is a modest monthly Social Security check? I say no. And I propose a modest  means-test that only affects those  with non-Social Security income of over $80,000 a year and phase out Social Security payment entirely for those that have $200,000 a year in retirement income. Think about how much money you have to have.”

The argument is insulting and wrong. Who is to decide what I have to have? What if my needs change due to illness? Is $80,000 a year going to be enough? Nursing home care, in-home care, drugs, and medical care are very expensive. Inflation and economic policies have sky-rocketed the price of many goods and services. This arbitrary amount may not buy as much as it used to since the cost of living has escalated.

Social Security is a tax, it is no insurance and we pay taxes even on Social Security income. People are forced to take Medicare at 65 and pay expensive insurance plans for drugs, hospital, and doctors.

How about the Social Security lock box that has been robbed long time ago by politicians who spent our money with compunction? We were told that it is our money to have upon retirement at the age of 65. There is a reason why the Social Security Administration keeps accurate records of each individual’s contribution made throughout his/her employment life in order to determine the amount of annual benefit. That is an earned entitlement.

Go to a Social Security office in northern Virginia and it is overrun with illegal aliens who do not speak English. How long have these people, who are mostly young, have been paying into Social Security? What right do they have to draw Social Security benefits that were reserved and paid for by American citizens?

Christie makes the Marxist argument that people should draw benefits according to the slogan made popular by Karl Marx, “From each according to his ability, to each according to his need,” the German version, “Jeder nach seinen Fähigkeiten, jedem nach seinen Bedürfnissen,” expressing the idea that communism will make enough goods and services that would meet and fulfill everyone’s needs.

This is outrageous in itself. Anybody who lived under communism can attest to the fact that the economy was plagued by chronic shortages and people were deprived of basics, suffered daily, lost weight, were anemic, malnourished, even starved to death. People are also familiar with the Jamestown experiment in communism when everyone worked the land collectively but received an equal share of the crop. Some worked harder, some were slackers. The colony of settlers almost starved to death. The following year, they reverted to individual plots of land and production flourished.

Marx made famous the phrase, “From each according to his ability, to each according to his need,” but he perhaps borrowed it from Louis Blanc who used it in 1839, an idea attributed to the Frenchman Etienne-Gabriel Morelly who wrote in 1755 a bizarre work, Code of Nature.
Under the heading, Sacred and Fundamental Laws that would tear out the roots of vice and of all the evils of society, Morelly wrote:

“I. Nothing in society will belong to anyone, either as a personal possession or as capital goods, except the things for which the person has immediate use, for either his needs, his pleasures, or his daily work.

II. Every citizen will be a public man, sustained by, supported by, and occupied at the public expense.

III. Every citizen will make his particular contribution to the activities of the community according to his capacity, his talent and his age; it is on this basis that his duties will be determined, in conformity with the distributive laws.” https://www.marxists.org/subject/utopian/morelly/code-nature.htm

What happens when a retiree passes on? His/her Social Security benefits revert back to the government if they are not married at the time. If a person were allowed to invest their money into private retirement funds, the money would revert back to the heirs and, even after paying inheritance tax, there will still be potential money left over.

Like Christie, we also “believe in the dignity of work,” but we must send young, able-bodied welfare recipients and illegal aliens to work for their unearned and generous benefits instead of sending them Social Security checks every month, while expecting those who paid into the system to have benefits reduced or confiscated altogether. If a well-off retiree chooses to donate his/her benefits, that is a different story. But forcing them to give up their benefits is Marxist confiscation and forced redistribution of wealth.

No matter how you look at what Governor Christie proposes in regards to entitlements, a progressive term that implies that anyone who receives any form of Social Security is entitled to it, regardless of whether they paid into Social Security or not, smacks of more wealth redistribution decided by greedy politicians who have already spent the supposed Social Security lockbox and threw away the key. If anything needs cutting or confiscating is the politicians’ power and insatiable desire to spend the taxpayers’ money.

 Copyright: Ileana Johnson 2015

 

 

 

National Debt Is Still the Biggest Threat to Our National Security

“An unlimited power to tax involves, necessarily a power to destroy, because there is a limit beyond which no institution and no property can bear taxation.” – John Marshall

Americans are in denial about the simple fact that our national debt is the biggest threat to our national security. National debt grew exponentially from Washington’s profligate deficit spending, recessions, and wars.

When I looked today at the national debt clock, each taxpayer owed approximately $142,000, the figure changing rapidly based on factors such as the value of the dollar, trade deficits, and the latest sums borrowed from U.S. taxpayers or from whatever country willing to buy our Treasury Securities, T-bills, T-notes, and T-bonds - China, Japan, and oil exporters being the largest buyers of U.S. debt so far.

The national debt to most Americans is something on paper in a faraway place that does not concern or affect us. Americans have no idea how it grew so exponentially large, where it came from, who owes it, who owns it, and how many zeroes a trillion has.

Perhaps the debt figure would become more real to Americans and take on dire significance if each taxpaying citizen would receive a bill for $142,000 payable in full right now, no kicking the can down the road to our children and grandchildren in exchange for our current comfort.

It is true, our national debt is measured in dollars, which we can always print in order to meet our payments. This is called monetizing the deficit. Doing so, however, creates inflation, as too much money is chasing too few goods. A responsible government should never print money in outlandish excess of GDP, the amount of final goods and services produced in a year. If they do, hyperinflation will occur, and severe devaluation of the currency.

“Since 1971, U.S. borrowed $50 trillion to produce only $13 trillion of goods and services in a 40 year period.” Egon von Greyerz, a financial analyst with Matterhorn Asset Management AG in Zurich, Switzerland, said, “From 1971 when President Nixon ended the gold-backing of the dollar, virtually all of the growth in the Western world has come from the massive increase in credit rather than from real growth in the economy.”

The mantra that the “rich are not paying their fair share” promoted by the MSM sound bites and the Democrat ruling party prompted many to calculate what would happen if we were to confiscate every millionaire and billionaire’s wealth, what impact would have on our national debt, the accumulated budget deficits of previous years. All the U.S. accumulated wealth would last a mere two months.

There is a difference between income and wealth. The Democrats are talking about taxing the rich (income), not taxing the wealth – big difference which voters clearly do not understand. Taxing income will result in “spreading the wealth” from producers to takers in the name of “social justice” and the subsequent consumer spending, with no tangible assets created. Excessive tax discourages capital formation and job creation, stifling economic growth. Perhaps that is the political intent of the ruling party.

Taxing the rich already brings in the lion’s share of revenue to the Treasury. If the rich are taxed too much, who is going to create manufacturing jobs, the government?

Average earners and small businesses that pay taxes at the personal income tax level are now the rich - the middle class will be taxed more when the Bush era tax cuts expire and the Obamacare taxes will go into effect in January 2013, contracting job creation. The Democrats and the President have no intention or concrete plans to cut spending. Their main goal seems to be tax increases.

According to Mark Steyn, if the government was to confiscate all of the $44 billion that Warren Buffett has, it would only last four days at the current level of spending.

Much ado has been made in the press about Warren Buffet who did not pay the same tax percentage as his secretary. When Mr. Buffett complained, I was not clear what kept him from writing a “fair share” check to the IRS, matching his secretary’s percentage.

Mark Steyn calculated again that, if everyone’s tax indebtedness would go up according to this Buffett rule, the deficit created by the Obama administration in 2011 would be paid off in 514 years and we would still have the deficits created in the other three years of this presidency.

The national debt has exceeded $16.3 trillion but Gross Domestic Product (all the final goods and services produced in a year domestically) is only $15.3 trillion, one trillion short. The federal revenue from taxes is $2.4 trillion. We have spent almost 7 times what we raise in taxes annually. 

The problem is not that Americans, rich or poor, are not paying enough taxes, the problem is that Congress and this administration are spending too much money. Spending to GDP ratio is 41 percent.

We have paid so far in 2012 almost $4 trillion in interest from excessive borrowing when our money supply from cash and savings is $10.3 trillion.

Our national debt has exploded in the last four years. During President Obama’s first three years in office, it grew by $4.7 trillion, an increase of 45 percent. (factcheck.org)

Our current policy seems to be putting pressure on the U.S. dollar until two options remain - default on the U.S. debt, or monetizing it by printing more money. If we default, as in any case of bankruptcy, creditor nations would demand payment in American assets – our oil fields, mines, land, parks, monuments, buildings, military bases, and even the indentured servitude of generations of taxpayers.

Can we refuse to pay our national debt?  We could but the consequences might not be so pleasant. Britain, Germany, and Italy blockaded the ports of Venezuela during the Venezuelan Crisis of 1902-1903 when dictator Cipriano Castro refused to pay foreign debts and damages suffered by European citizens in the Venezuelan civil war.

Defense Secretary Leon Panetta said the following during the November 20 speech to the Center for a New American Security (a think-tank in Washington):

“One of the national security threats is the question of whether or not the leaders we elect can, in fact, govern and can, in fact deal with the challenges that face this country.” (Emelie Rutherford, Defense Daily, November 26, 2012)

Secretary Panetta was initially questioned during this meeting why the Senate failed to pass the Law of the Sea Treaty (LOST). Most Americans are actually glad that LOST was not ratified since it is part of U.N. Agenda 21’s plan of global governance.

Sequestration may not be such a good idea when it involves the military. Si vis pacem, para bellum, the Romans said, “if you want peace, prepare for war.”

Panetta acknowledged that budgeting “can’t just be about cutting, it’s got to be about investing, investing in space and cyber, investing in unmanned systems, investing in the kind of capability to mobilize quickly if we have to. And most importantly, maintaining our defense industrial base in this country so that we are not in a position where I’m forced to contract out the most important defense capabilities that I need. I can’t do that. I can’t just contract those out to another country. I’ve got to have that capability here in the United States.”

National debt is the number one threat to national security. If we keep squandering trillions of dollars borrowed from our potential foes and have nothing to show for our spending, except increasing dependency of our population on welfare, food stamps, and entitlements, if we cut NASA and rent space on Russian flights, if we spend so much that we are no longer able to invest in infrastructure, technology, medicine, space exploration, industry, manufacturing, and defense, our integrity as a powerful nation is severely threatened and damaged.

 

 

Welfare Recipients Entitled to Be Lazy and in Debt

“I must confess, when I see anyone with an Obama 2012 bumper sticker, I recognize them as a threat to the gene pool.” Allen West

Yesterday I saw a new bumper sticker in Maryland, “Obama cares.” President Obama and his administration must care a whole lot – they love to spend so much money that we are running up a projected fifth year of $1 trillion deficit spending.

The national debt clock is changing red numbers as fast I can focus, reflecting the out-of-control spending in Washington and the weak value of the dollar in conjunction with our disastrous energy policy, high unemployment rates, comatose economic growth, and the rapid rise in welfare.

The public debt today is nearing $16 trillion while U.S. tax revenues are a mere $2.3 trillion. U.S. debt interest alone in 2012 is $3.9 trillion. U.S. debt held by foreign countries is approximately $5.4 trillion.

Total national assets, including small businesses, corporations and households are $91.3 trillion. If we sold them at some unprecedented national auction, that would not be enough to cover the total U.S. unfunded liabilities (Social Security, prescription drugs, Medicare) which are fast approaching $120 trillion.  

Maybe we have enough cash to pay off our national debt? The Federal Reserve (Fed) monetary base is $2.7 trillion, M2 money supply is $9.9 trillion, and Treasury securities $1.2 trillion, for a total currency and credit derivatives (created and bogus money) of $734 trillion.

Maybe we produce enough goods and services in a year (GDP) to cover our national debt and insane spending? U.S. gross domestic product is $15.3 trillion, a drop in the bucket when compared to the federal, state, and local government spending of nearly $7 trillion.

The following ratios paint a very ugly picture of our economy as well.

The ratio of spending to GDP is 44.2 percent.

The ratio of gross debt to GDP is 104.19 percent.
The ratio of revenue to GDP is 32.32 percent.

The largest budget items of the federal spending are listed below. The sad part is that, if I log onto the debt clock.org later today, the numbers would have changed very rapidly up or down, generally up.

-          Medicare/Medicaid ($798 billion)

-          Social Security ($740 billion)

-          Defense/Wars ($673 billion)

-          Income Security ($371 billion)

-          Net Interest on Debt ($226 billion)

-          Federal Pensions ($214 billion)

The United States has a constantly changing population of approximately 315 million, give or take a few 10-20 million illegal aliens who are either in the process of being amnestied by the Obama administration because they were brought here by “no fault of their own” and thus deserve U.S. citizenship ahead of overseas legally petitioning immigrants who have done everything according to the law but are hindered by vast oceans, and more illegal aliens who have already completed the arduous process of having jumped or crossed the southern border “undocumented” and are now benefitting from our generous welfare (income security) system, compliments of politicians who always need grateful legal or illegal voters.

The labor force is listed at 144 million although not long ago it was 156 million. These are the discouraged workers who are no longer counted and have fallen off the face of the earth.  Thirteen million Americans are officially unemployed but the actual unemployment number listed is 23 million. Where did the other 10 million unemployed workers go? They must have disappeared to the same place where President Obama’s shovel ready jobs went.

Not to worry, there are 67.5 million retirees and SSI recipients and almost 46 million food stamp recipients to draw from the overabundance of the combined U.S. evil capitalist wealth which was not created by hard-working Americans but by a benevolent federal government who taxed the heck out of working Americans and then built roads and bridges to the front door of all U.S. small businesses and corporations.

Welfare spending, cash, food, housing, medical care, social services for the poor has increased seventeen times since Lyndon Johnson’s War on Poverty in 1964. We obviously lost this war on poverty since the Obama administration plans to increase welfare spending rather than reduce it. He will need $46 trillion today and $1-2 trillion a year in the future to meet all the welfare promises made. (Heritage Foundation, Issues 2012)

TANF (Temporary Assistance for Needy Families) was a Clinton era 1996 welfare reform success story which prepared welfare recipients for work through on-the-job training, unsubsidized employment, attending high school or a GED program, vocational education, community service work, job search, and job readiness training.  Recipients with children had to perform 20-30 hours a week of work in exchange for cash benefits. Welfare cases dropped by 50 percent, employment earnings increased, and child poverty rates decreased. (Amy Payne, Heritage Insider)

Unfortunately, the Obama administration circumvented Congress and announced a directive through the HHS that welfare recipients no longer have to work to fulfill the TANF requirements. “Vocational training or job search/readiness programs would count, even personal care activities, massage, motivational reading, and journaling.”  “President Obama made no secret about his plans to expand the welfare state permanently,” forcing recipients into a permanent cycle of dependence on government. (Amy Payne, The End of Welfare Reform As We Know It, July 18, 2012)

Since the 1960s, the U.S. has spent $16 trillion on welfare and is projected to spend almost $11 trillion over the next ten years. About 70 welfare programs are spread over 13 federal agencies and account for $900 billion a year in expenditures. (Heritage Foundation, March 17, 2011)

We are fast becoming a nation of lazy and entitled, government dependent citizens, approaching a high percentage of our population, legal and illegal. All entitlements, food stamps, unemployment, housing assistance, Medicare, Medicaid, and Social Security represent more than half of total spending. At this rate of welfare extension (Obama added millions more to the welfare rolls), Social Security will be exhausted before the projected 2036 because, “in net-present-value terms, Social Security owes $9.1 trillion more in benefits than it will receive in taxes.” Spending on all entitlements “will consume all revenues within less than two generations. No revenue will be left to pay for other government spending, including constitutional functions such as defense.” Who needs national defense when Iran, North Korea, Russia, and China are flexing their military muscles all around the world? (Issues 2012 - The Candidate’s Briefing Book, p. 46, The Heritage Foundation, 2011)

As I watch again the fast changing numbers of the national debt clock.org, I am reminded that we are dismally broke and we cannot afford more welfare. Our number one threat to national security is not just the out-of-control spending that our President, with the blessing of Congress, is engaging in, but the entitlement mentality of able-bodied and healthy Americans on permanent welfare who produce more welfare dependent children at the expense of those who work, gleefully voting for corrupt politicians who promise them more welfare, locking them into perennial poverty and enslavement to a benevolent government that produces nothing.