The Latest Government Trust Fund To Go Bankrupt

Tyler Durden's picture

Submitted by Sovereign Man

The Latest Government Trust Fund To Go Bankrupt

On June 6, 1932, President Herbert Hoover imposed the first ever national gasoline tax in the United States, initially set at 1 cent per gallon.

It was a major success for the federal government; the tax on gasoline alone was responsible for over 15% of their 1933 tax revenue.

What’s curious is that the Senate Finance Committee issued a report the following year stating that the federal gasoline tax should be repealed. But that never happened.

Instead it went up.

Under President Eisenhower, the tax increased to 3 cents per gallon. Under Reagan, 9 cents.

It’s risen steadily through the years to a level of 18.4 cents for every gallon of unleaded fuel, and 24.4 cents per gallon of diesel.

All of this tax revenue is –supposed– to go to the Federal Highway Trust Fund, something established back in the 1950s to finance the care and maintenance of the nation’s highways.

And now it, too, is insolvent.

Earlier this week I told you about Social Security’s Disability Insurance Trust Fund (DI), which will become insolvent in a matter of months.

The DI problem (just like the rest of Social Security) has been a long time coming.

But rather than form some meaningful solution, Congress has instead opted to commit financial fraud by commingling DI monies together with the other Social Security funds.

Now comes the Highway Trust Fund.

The difference between DI and the Highway Trust fund is that this one won’t be insolvent in a matter of years or months. Their own data shows that it may very well be toast… today.

Once again- Congress to the rescue.

Having waited until almost quite literally the last minute, their solution is to… wait for it… kick the can down the road.

Congress has now passed a 90-day stay of execution for the Highway Trust Fund, which only delays the inevitable.

Over the next three months they’ll sit down to the task of figuring out who to steal from.

They’re either going to raise taxes on you.

Or they’ll raise taxes on someone else, the costs of which will ultimately be passed on to you.

Or they’ll simply default on their obligations to the residents of the United States to maintain the federal highway system.

None of this should come as a surprise. This is what happens when nations go bankrupt: one by one, its major institutions fall into insolvency.

Today it’s the Highway Fund. Tomorrow it’ll be the Pension Benefit Guarantee Corporation (we’ll talk about that one soon) and the United States Postal Service.

Then it’ll be Social Security and Medicare. Then the Federal Reserve. And eventually it’ll be the United States government itself.

The signs are everywhere– every single one of these hallowed institutions is flat broke.

It’s no longer some wild assertion to say that. Their own financial statements show that they’re insolvent. And it’s not hard to figure out what happens down the road.

Bankrupt governments invariably resort to plundering the wealth of their citizens. Inflation. Higher taxes. Confiscation of assets. Indebting unborn generations. And defaulting on the benefits promises they made to voters.

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38BWD22's picture

 

 

The government has no money.  Whatever they get is taken from the people by taxation, printing and debt.

It is our people who have money (EDIT: the banksters do have LOTS of money), though our people not very much.

Do not depend on the government.

SafelyGraze's picture

privatize the interstates

hugs,
the national association of tollroad operators
and EZpass 

Amy G. Dala's picture

The pisser is, it's not as if the interstate highway system has to be constructed from scratch . . .that's already been done.

Privatization makes perfect sense. 

kaiserhoff's picture

I hate to criticize Simon, because he at least writes about the real problems, but once more, for the record.

1  There never was a trust fund, only fraudulent accounting entries.   The money was spent long ago.

2  The problem is that the cash flow is going sharply negative.  That will get worse, fast.

3  The real federal debt is well north of 200 Trillion.  It is quite impossible to calculate accurately at this point, although some brave souls are trying.

Son of Loki's picture
Foreign Company Now Owns Six Major US Tolls Roads

 

http://www.thetruckersreport.com/foreign-company-now-owns-six-major-us-t...

 

First foreign-owned toll road in Texas downgraded to junk bond status

 

http://blog.mysanantonio.com/terrihall/2013/10/first-foreign-owned-toll-...

Publicus's picture

Tax is a farse, there is no need for any tax, simply print money to fund economic activity.

Troll Magnet's picture

meh.
goy problems.
goldman sachs and israel are fine.

JR's picture

Exactly, taxes have never been as much about raising revenue as they are in punishing and controlling the citizens. It's called wealth redistribution - a companion piece to the bankers' 1913 Federal Reserve Act.

The IRS scandals combined with dictatorial "taxing" authority given to IRS by the SCOTUS in Obamacare are showing producers who pay America’s taxes that the legions of Obama voters, food stampers etc., are on the receiving end of steadily climbing taxes.

The government needs the taxes, some argue, just to marshal discipline on the sheeple, keeping them barefoot and down on the farm while consistently letting them taste the whip of Leviathan.

But the taxes aren’t really needed when monetizing is an option.

It is a sobering thought that the government and TBTFs can operate, even at current level, without levying any taxes whatever, except for the fact that they want a redistribution of income and to keep alive Americans’ faith in the currency.  As G. Edward Griffin said in 1994, “All it (the government) has to do is create the required money through the Federal Reserve System by monetizing its own bonds.  In fact, most of the money it now spends is obtained that way.”

Griffin, in The Creature From Jekyll Island, wrote: “If the idea of eliminating the IRS sounds like good news, remember that the inflation that results from monetizing the debt is just as much a tax as any other, but, because it is hidden and so few Americans understand how it works, it is more politically popular than a tax that is out in the open.

“Inflation can be likened to a game of Monopoly in which the game’s banker has no limit to the amount of money he can distribute.  With each throw of the dice he reaches under the table and brings up another stack of those paper tokens which all the players must use as money.  If the banker is also one of the players –and in our real world that is exactly the case –obviously he is going to end up owning all the property.  But, in the meantime, the increasing flood of money swirls out from the banker and engulfs the players.  As the quantity of money becomes greater, the relative worth of each token becomes less, and the prices bid for the properties goes up.  The game is called ‘monopoly’ for a reason.  In the end, one person holds all the property and everyone else is bankrupt…”

Charming Anarchist's picture

Taxation compells folks to handle the state-printed fiat.  You can not pay your taxes in alternate currencies. 

 

Without taxation, folks would trade in alternate/non-inflationary currencies and the printing press would be impotent.  Good money will chase fiat/bad money out.  From the perspective of the statesmen and their cronies, printed money without taxation would be worthless because in the long run, it would not circulate. 

Zen Master's picture

This is the FUCKING STUPIDEST THING I HAVE EVER HEARD!!!!!!

Yes... I am shouting. Privitization makes perfect sense, really?

You can't fix stupid.

kaiserhoff's picture

Safely is a master at quiet, understated sarcasm, delivered with tender loving, almost sincerity.

Just read his posts and listen to the music.  You'll see;)

(consider the source of the recommendation).

greyghost's picture

ZEN...remember this is simon says. simon says buy swamp land in bolivia. buy beach front property in the indian ocean and collect aircraft parts. sell parts and buy gold and store it in zimbabwe....safety deposit boxes are real cheap there. borrow against your gold and buy more swamp land....this time in argentina. sell beach front property and buy gold and store in ukraine....do not store in safety deposit box....they are not very safe here. however twenty miles outside of a little village in west ukraine is a broken down king tiger tank....bury it under the tank. send what ever i demand to "buried stash" and i will tell you the name of the little village.........

38BWD22's picture

 

 

SafelyGraze

+ $$$$$$$$$$$

I should have mentioned corrupt crony capitalists...

Bay of Pigs's picture

You remind me of an old ZH poster. Is this a new handle?

daveO's picture

The state of NC is adding toll lanes to I-77 north of Charlotte. You would not believe the number of gimme-pigs who are screaming about it. They've been trained to think everyone else should pay for their roads.

http://www.wsoctv.com/list/news/local/toll-roads-possible-i-77/mJNh/

ZD1's picture

California's roads and highways are in abysmal shape yet California has the highest gas taxes in the country at 60.75 cents a gallon. Of course Gov. Moonbeam and his communist Democrats in that one party state want to raise gas taxes higher with the empty promise that the tax money will be used to improve the roads.

As of January 1, Californians now also pay a global warming "fee" (aka tax) on top of the gas taxes as part of the the Democrat's Cap and Trade program. The global warming tax adds about 10 cents a gallon to wholesale gas prices and 12 cents to diesel prices. But with gas prices down about one dollar from last year, few residents have noticed the global warming fee being added to their gas bills.

Californians now pay a whopping 77 cents per gallon extra on gasoline due to fees and taxes.

 

http://dailycaller.com/2015/01/07/ca-imposes-a-global-warming-tax-for-fu...

 

JR's picture

Big corporations don’t privatize, they monopolize. How did it work when the currency was privatized? Often "privatized" means government-backed monopoly. Until the government fulfills its duty to oppose monopoly and refrain from fascism, we don't have a workable government. Here’s how Mother Jones explained it in January, 2007.

Goldman Sachs' Road to Riches | 2007

Like a real estate agent representing both buyer and seller, Goldman Sachs simultaneously urges governments to privatize highways, advises them as they structure the deals, and buys a piece of the action.

Number of city and state governments that have hired Goldman Sachs to advise them on privatizing highways: 4

Amount that Goldman Sachs clients recently put into a fund that invests in infrastructure such as highways: $3 billion

Amount that Goldman Sachs gave to a PAC established by its lobbying firm, Hillco Partners, to push a 2001 Texas ballot measure allowing privately operated roads: $10,000

Minimum amount Goldman Sachs paid Hillco lobbyist J. McCartt, a former aide to Texas governor Rick Perry, between 2002 and 2005: $95,000

Difference between the amount Goldman Sachs offered for Houston's 83 miles of toll roads in 2005 and what a subsequent study found they were really worth: 86 percent …

Number of Goldman Sachs funds that invested in Australian toll road operator MIG while the bank was advising Indiana on its privatization deal with MIG: 3

Amount it would cost to drive through NYC's Holland Tunnel if a MIG-style toll pricing scheme had been put in place at its inception: $185.

http://www.motherjones.com/politics/2007/01/goldman-sachs-road-riches

One World Mafia's picture

"privatize the interstates

hugs,
the national association of tollroad operators
and EZpass "

Make your check payable to Sum Ting Wong and Ho Lee Fuk.

junction's picture

When Henry Paulson became Secretary of Treasury in 2006, he immediately disposed of his shares in Goldman Sachs, where he had been CEO .  Thanks to a law passed in 1989, Paulson paid no taxes on the $500 million in stock he sold, primarily Goldman Sachs stock.  The 1989 law was (cough, cough) supposed to enable to Wall Street experts and the like to avoid conflicts of interest when they accepted top Federal government positions.  Paulson just had to put his sale proceeds into government securities to save $100 million in income taxes.  Then Paulson, supposedly now free of conflicts of interest, used $800 billion of TARP funds to bail out Wall Street instead of the intended home owners, stuck with underwater mortgages.  Paulson also pushed for the $180 billion loan to AIG, which used billions of that money to pay off Goldman Sachs on AIG CDS derivatives it had, 100 cents on the dollar.  Paulson also decided to let Lehman Bros. collapse, which was Goldman Sachs primary competitor on Wall Street.  By allowing the U.S. housing market to crash, he helped John Paulson's hedge fund make over $10 billion, since that Paulson had bet his fortune that mortgage backed securities would crater.  Of course, the lamestream press accepts Henry Paulson's claim that John Paulson is not his second cousin and that John Paulson never made a midnight deal with Henry Paulson. 

The amounts involved in the Highway Trust Fund are peanuts compared to the hundreds of billions of dollars shoveled to Wall Street and money center banks by our corrupt and lying political leaders, many of whom also work for the drug cartels. All that money to insiders, almost 2 trillion dollars, is now owed by all of us unless we leave the country for good. 

Son of Loki's picture

Excellent post. I'm surprised Barry didn't award Hanky with a Medal of Freedom for his bravery in dealing with the financial mess ... caused by his own institution and their ilk.

 

People would rather be outraged by Cecil the lion then by being big-time butt-holed by Hank and his buddies.

 

Clueless. I see no change ahead, only more difficulty for the Everyday Merikan.

Blankenstein's picture

Agree with most, but Hank Paulson didn't allow the housing market to crash, it was going to crash because there was a complete detachment from underlying fundamentals. He just bailed out the housing market casino players on Wall Street.   John Paulson stacked "the deck" of MBS to ensure that the ones he was betting against were the worst performing, while Goldman sold the other side as quality investments.  All this fraud and no one went to jail and most still have their same jobs.  Sickening.

847328_3527's picture
Jericho, Cecil the lion's brother, killed

 

 

Jericho, brother of Cecil the lion, was killed by hunter on Saturday, Zimbabwe Conservation Task Force's chairman confirmed to USA TODAY

 

http://www.msn.com/en-us/news/world/jericho-cecil-the-lions-brother-kill...

 

I bet that lion was unarmed and the hunter white.

 

#lionlivesmatter

 

 

Metalredneck's picture

Better go back to HuffPo.

#dentistlivesmater

boattrash's picture

If Obama had a lion, he'd probably look like Cecil...

Handful of Dust's picture

Blankenstein ... jail is for the little peeples.

Bloppy's picture

There are plenty of Zimbabwe dollars available now that they've been exchanged $17 quadrillion to US$5. Contact one R Mugabe for more information.

 

Leftists: MSNBC's Ed Schultz canned for speaking out against Obamatrade

http://tinyurl.com/qyq6z5f

 

drendebe10's picture

Fukn corrupt incompetent crook elected ruling political elite imbecile miedras.... String the lot of em up & set em on fire...

ebworthen's picture

The public trust of .gov is about flat broke right now too.

New_Meat's picture

"I guess the projects weren't as 'shovel-ready' as we expected."

Winston Churchill's picture

With all the shit spoken in DC, you'd think they'd have plenty of shovel ready piles.

janus's picture

sure, they're shovel-ready...but the spades are breaking ground for a grave -- a continental tomb, as it were.

 

Amy G. Dala's picture

Whoa, there were plenty of shovel-ready projects with funding already in place, but unfortunately most of them were in Year 5 or 6 of an eternal environmental impact study.

orangegeek's picture

Call the ink department and the paper department and wake that fat pig yellen up.

 

MOAR PRINTING FIXES EVERYTHING!!!

Soul Glow's picture

Steal the pensions and put all the monies in USTs.  Everything will be fine.

Oh, and then print moar!

:)

Winston Churchill's picture

Somebody has to get that toxic crap off the FedRes balance sheet.

Don't you love it when a plan comes together ?

Fahque Imuhnutjahb's picture

 

 

Abolish all forms of taxation; furlough all public sector employees; privatize all governmental institutions and assets to the highest bidder;

use those proceeds as rebates to those who have paid taxes over the years, then let the chips fall were they may. 

Skateboarder's picture

That's a damn fine list of things that should but will never happen.  ;-)

sessinpo's picture

Fahque Imuhnutjahb    Abolish all forms of taxation; furlough all public sector employees; privatize all governmental institutions and assets to the highest bidder;

use those proceeds as rebates to those who have paid taxes over the years, then let the chips fall were they may.

----------------------------

                    Skateboarder    That's a damn fine list of things that should but will never happen.  ;-)

---------------------------

Just to play devil's advocate, I am curious if you would still feel the same way if some of those institutions went to a bidder such as George Soros or the Koch brothers? Or how about Rupert Murdoch or Warren Buffet?

rejected's picture

Many laugh at Russia but, that's exactly what they did when the oil prices reduced government revenue. Putin had thousands layed off.

As for privatizing government institutions, Other than it being fascist,,, I haven't seen a real success story. Amtrack? USPS?

cossack55's picture

You don't need highways when using your brand new Jetsons flying car manufactured by:

a.  Apple

b.  Google

c.  Elon Musk

d.  Fiat

Skateboarder's picture

Now for the low price of a $10M ultra-generational mortgage only. Get yours today!

SamEyeAm's picture

Good. Let all the ponzi schemes go to zero.

Element's picture

bu ... what the? ... the economy was recovering ... 'n everything ...

Jack Burton's picture

Disability is one of the great scandals in America. It has become the new welfare for dead beats. All of us know the type, the 30 year old guy whose only goal in the work force is to gain a disability. My local post office which employees 4 mailmen, has had 3 mailmen go on diability in less than 5 years. From what I hear, these guys are ex military, the only reason they applied with the Post Office is how easy a disability is to get. Mind you, this is a small town, I know these people on a personal level.

I use this just as example. All across the blue collar work force, disability is The sought after job! Just look at the numbers, they tell a story of mass fraud.

Amy G. Dala's picture

Jack, if you go to any union website, the most prominent adverts are for disability lawyers.

"GETTING HASSELLED OVER YOUR DISABILITY CLAIM? WE WILL GET YOU THE BENEFITS YOU DESERVE!"

kaiserhoff's picture

See the same thing in my area.  Without looking for such people, I know several "disabled" fellows who are working construction jobs, off the books, of course.  Shouldn't there be a "hotline" and rewards system for this fraud?

Nobody For President's picture

Here is the chart porn on Jack's statement:

http://www.washingtonpost.com/business/economy/more-workers-on-disabilit...

Huge scam, but I find it hard to blame the smucks that are just trying to get by - Paulson is the biggest scam of all, and that fucker ain't in jail.

Free Corozine!

corporatewhore's picture

physical disability or mental?

Everyone i know recently who received disability got it by claiming they were bipolar