Congress Proposes A Chilling Resolution On Social Security

Tyler Durden's picture

Submitted by Simon Black via SovereignMan.com,

On August 14, 1935, President Franklin Roosevelt arrived at his desk to sign the Social Security Act into law.

It had been a contentious legislative process, something like the Obamacare of its day.

Fiscally conservative politicians derided the program for its obvious long-term costs, the massive bureaucracy that it would create, and the huge tax increase that it represented on workers.

But Roosevelt was able to find support, and the law was passed.

And just before signing it, he proudly proclaimed that the law would go down in history “as a protection to future administrations of the Government against the necessity of going deeply into debt to furnish relief to the needy.”

Needless to say, that didn’t happen. Quite the opposite, actually.

Just like most western governments, the US government has gone deeply into debt to fund its social insurance programs.

Officially, the US government is now $18.5 trillion in debt, and Social Security is the biggest financial sinkhole in America.

Social Security’s various trust funds currently hold about $2.7 trillion in total assets; yet the government itself estimates the program’s liabilities to exceed $40 trillion.

And Social Security’s second biggest trust fund, the Disability Insurance fund, will be fully depleted in a matter of weeks.

The trustees who manage these massive funds on behalf of the current and future retirees of America are clearly concerned.

In the 2015 report of the Social Security and Medicare Board of Trustees they state very plainly:

“Social Security as a whole as well as Medicare cannot sustain projected long-run program costs…”, and that the government should be “giving the public adequate time to prepare.”

Wow.

Now, we always hear politicians say that ‘Social Security is going to be just fine’. So this Board of Trustees must be a bunch of wackos. Who are these guys anyhow?

The Treasury Secretary of the United States of America, as it turns out. Along with the Secretary of Health and Human Services. The Secretary of Labor. Etc.

These are the folks who sign their name to the report saying that Social Security is going bust, and that Congress needs to give people time to prepare.

And prepare they should.

The US Government Accountability Office recently released a report showing that tens of millions of Americans haven’t saved a penny for retirement; and roughly half of Baby Boomers have zero retirement savings.

This means that there’s an overwhelming number of Americans pinning all of their retirement hopes on Social Security.

Bad idea. In a recently proposed resolution, H. Res 488, Congress states point blank that Social Security “was never intended by Congress to be the sole source of retirement income for families.”

Apparently they got the message from the Social Security Trustees and they want to start preparing people for the inevitable truth.

This is no longer some wild conspiracy theory.

The Treasury Secretary is saying it. Congress is saying it. The numbers are screaming it: Social Security is going to fail.

Ultimately this is a just another chapter in the same story– that government cannot be relied on to provide or produce, only to squander and fail.

Sure, their intentions may be noble. But this level of serial incompetence can no longer be trusted, nor should we be foolish enough to believe that some new candidate can fix it.

If you’re in your fifties and beyond, you’re probably going to be OK and at least get 10-15 years of benefits.

If you’re in your 40s and below, you have to be 100% prepared to fend for yourself.

Fortunately you have time to recover. Time to build. And time to learn.

Financial literacy is absolutely critical here, which includes the ability to both generate income and manage money, two things that aren’t taught in the government controlled education system.

You might also consider some lifestyle adjustments, which may include moving abroad where your money can go much, much further.

Ultimately, learning to rely on yourself is no easy task, but it is an incredible opportunity to become more free.

And in doing so, one day you will no longer panic about the decisions being made by incompetent bureaucrats, because you will be the one in control of your own fate.

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Rikky's picture

Sure you pay into it your whole life and then they give you nothing out of it.  Seems fair in government accounting land.

El Vaquero's picture

If you like your Ponzi scheme, you can keep your Ponzi scheme.

NoDebt's picture

SS will be just fine.  When the chips are down they'll just take your 401k and IRA money to fund it.

I am more equal than others's picture

 

 

Suckers!

One borned every minute. 

MANvsMACHINE's picture

If they now admit that there's nothing to be received on the back end, why are we still paying into it?

Billy the Poet's picture

Well, there are these men with guns...

StackShinyStuff's picture

Anyone here should not be shocked by this "revelation"

Stuck on Zero's picture

The problem is with Social Security and not with Middle East wars, F35s, bank bailouts, tax loopholes for billionaires, pharma subsidies, farm subsidies, the MIC, and outrageous salaries and retirements for government employees.

TBT or not TBT's picture

Can I subsistence farm in the 1000ft2 of my Cali McMansion backyard that's not hardscape?   It does rain here during the winter.    Gonna be fine.  

Amish Hacker's picture

Yes, but you'll need the proper permits from federal, state and local governments.

Nick Jihad's picture

Don't leave the sprinkler on too long, or the EPA just might declare your back yard a "wetlands".

Okienomics's picture

Better check the HOA rules, I'm pretty sure they specificially forbid it.  Take your house if you have a chicken for eggs and pest control.

Momauguin Joe's picture

Wall Street. Quantitive easing. Membership has its privileges.

Squid-puppets a-go-go's picture

and then im sure ther'll be a new law soon criminalising back yard veggie growing. Coz you might feed the homeless with it. And only big Agriculture with the govt contracts knows how to produce food that is 'safe' for you and me

847328_3527's picture

I'd much rather use those Trillions to bomb the crap out of the ME and open dozens moar military bases aroun dthe world. We don't even have one in Tuluvu. Why pay back all those workers who have paid into the system?

 

Makes sense to me.

Save_America1st's picture

Hey, c'mon!  Was it over when the German's bombed Pearl Harbor???

Fuck No!!!

https://www.youtube.com/watch?v=ep-xgd_eETE

 

Are you ready for a Ponzi Party?????  Fuck yeah!!!

PONZI!  PONZI!  PONZI!  PONZI!!!

https://www.youtube.com/watch?v=y1Mk7idVfcA

 

espirit's picture

401 (k) plans are toast, derivatives or hypothecation ad infinitum.

Social Security is next, to continue funding the Public Sector which will fold to fund MIC.Gov pensions.

 

Who is going to be the last pension standing? Not hard to see the writing on the wall. 

bonderøven-farm ass's picture

I don't needs no So-so sekeerity!

Livin tha dream....It's MyRA fo me, bitchez....! 

boogerbently's picture

Then they'd better pay a cash settlement using compound interest on the avg DOW gain per year x how much and how long you paid in.

CheapBastard's picture

I'll be ok with them cutting benefits to old people if Congressmen take the same % cuts to their benefits, salaries and pensions.

boogerbently's picture

I've never seen the headline:

 

Welfare running out of money!

or foodstamps, school lunches, low income housing....

boogerbently's picture

I've never seen the headline:

 

Welfare running out of money!

or foodstamps, school lunches, low income housing....

Anonymous User's picture

HELL YEAH !!!

Working and paying taxes is for pimped hoes.

A REAL man needs to know how to kill something for eating it, use the land, store valuables, standing his ground and fuck everything else.

Kinda like this:

http://www.thepornster.com/video/67/

 

jimmytorpedo's picture

That would be Tuvalu?

They have the equivalent of a military base in that they measure sea level changes, (or lack thereof) in Funafuti.

Oppression takes many forms and Tuvalu is doing their part.

If you are dumb enough to give a criminal gang your money for retirement, you don't deserve to get any back.

When I pay my tithe to the criminals I don't expect any back.

dark_matter's picture

That rain belongs to the state. What makes you think you can use it to grow food?

Freddie's picture

The USA and Western europe can afford millions of illegal aliens flooding in but Social Security is screwed.  F them.  Soros and the other zio monsters.

hongdo's picture

Yeah, WTF. It's getting real and in the open.  I think we are looking at the convergence of multiple uncoordinated incompetents working on goals that were embedded a long time ago.  I have seen this first hand - give a dunce a job and hint what you want to happen, scare him he might get fired, then stand asside for true stupidity as they define their job and responsibilities and authorities themselves.  All independently with no idea of the ultilate consequences.  Red Russians, Red Guard, Pol Pat redux.  And you are in the middle.

erkme73's picture

Of course we could just all start to embezzle 10's of K from our local police youth mentoring program for 5-10 years... Ah, never mind, that doesn't turn out so well either.

Transformer's picture

This article, like most about Social Security left out the important fact that the Gov stole about $2.6 Trillion from the SS trust fund.  Even on Zero hedge these kind of articles want to make SS system out to be a big negative for the Gov.  If the congressman hadn't stole the money, SS would be solvent for many more years before there was aproblem

 

Hal n back's picture

so, back in 1995, Robert Rubin, we remember him, when Treas Sec under Bill "surplus" Clinton took marketable securities from the trusts in return for Treasuries. (if not for Y2K printing  we would not have had as biga run up in dot com and we would not have had huge taxes paid, which allowed the govt to come close to breakeven but nope. no surplus esp if you look at debt increase

 

What happend there with the marketable securities?

The entire  structure and system is BS.

ersatz007's picture

Well I guess on a positive note it's good to know that the only thing that has caused our 19$ trillion in debt is social security and the inept manner in which it has been run. Imagine if the other parts of our gov't, like the military or other agencies, caused this many problems and created debt??? Hoo boy would we be in bad shape!

ersatz007's picture

Thought bubble.........

Maybe if I had created some way to generate some income for my retirement. Hmm what if I start to grow poppy plants in my back yard and then manufacture and sell heroin??? I hear that's pretty popular with the kids these days. I'll call my company Creative Investment Agricultur - or CIA for short. I also am given to understand acronyms are all the rage these days!!

g speed's picture

just a word of advice----grow it in someone elses back yard---manufacture it at the local community center bathroom  and get cops to sell it in private prisons--  you will be rich---

gladius17's picture

On June 28 the police invaded my dilapidated trailer park home with guns drawn, due to my failure to appear in court on marijuana charges. (Felony possession of approx 1.5 ounces of marijuana in one quart mason jar.) They found three (3) poppy flowers in my large vegetable and flower garden. The investigators pulled up the plants by their roots, put them on a scale, and concluded that I was in possession of several pounds of opium. They charged me with Opium Trafficking and held me in jail on a $50,000 property bond for four months, until the prosecutor finally offered a reasonable plea bargain, which I accepted. I was finally released from jail on Nov 3rd, and just got all my computer equipment back today. While in jail, my trailer was ransacked by the local meth heads and at least $5,000 worth of tools, equipment, and automotive parts was stolen. Then the landlord evicted me, with a 10 day eviction notice placed on the door, which my mom didn't find until days later. I'm now in the process of sorting through my remaining possessions in the storage locker and picking up the pieces of my broken life.

True story.

Think very carefully and plan well before implementing your get rich quick scheme.

By the way, my investigations inside and outside of the jail from multiple sources have revealed that the sheriff of this county is a drug dealer (meth and heroin) and murderer. He was in business with the former sheriff, who died recently under suspicious circumstances. (The ole "heart attack during hunting trip" routine. Body cremated less than 24 hours later, with no autopsy.)

Heroin of the highest purity has been hitting the streets here (Alabama) since about 2012. This was right about the time of the proposed Syrian invasion, which the American people rejected, necessitating TPTB to use other means to achieve their goal. Shortly thereafter, the well-funded organization known as ISIS magically appeared from the ether. And where does ISIS get their funds from? From the opium fields of Afghanistan of course, which are not accidentally or coincidentally producing more opium and heroin than ever before, under U.S./CIA management. The Taliban had almost completely shut down opium production just before the U.S. invasion in 2001. The CIA brings it in, sells it, and the funds go somewhere.

We are definitely living in interesting times.

 

 

Oldwood's picture

Well, first off I would suggest that our 19 trillion in debt is not inclusive of SS, as that nut is closer to 40 trillion. Secondly, SS was an explicit contract between those being forced to contribute to it and its eventual payout...like life insurance, whereas general taxes are for general things and while wasteful AND destructive, are not the same thing. We should be able to focus on two separate issues without equating them.

If it is determined that SS must be changed to a means tested program, at 62, I will not like it but accept it...under one condition (like anyone cares), they must stop calling it insurance and they must fund it from general revenues and NOT a specific payroll tax. If they are going to convert and insurance program to a welfare program, then CALL IT WHAT IT IS.

Final Authority's picture

Sorry, had to down vote you for this statement: "SS was an explicit contract between those being forced to contribute to it and its eventual payout". Please produce this contract signed by both parties.  I never signed one yet was coereced into paying into the scam for many years. I doubt it was a good investment....

hongdo's picture

Sorry, have to agree.  What the state gives the state can take away.  Get used to it.

crisrose's picture

When you or your parents applied for a social security card - that is your contract.  When you voluntarily provided the SS number to your employer.  There is no law requiring anyone born in the US to possess a social security number in order to work.  None.  This is the same contract that makes your wages subject to the IRC.  

 

https://www.law.cornell.edu/wex/contract_implied_in_fact

FreedomGuy's picture

For my entire adult life I have been hearing the continual lies about S.Sec. It was around Reagan's time the tax went up to 12.4% and all was good, forever. Of course it is never forever, is it? In fact, it is rarely for long.

1. It is NOT a retirement plan by any definition of the word.

2. You have no property rights unlike real wealth, a real retirement plan and things you actually own.

3. It prevents the actual building of wealth and transfer of wealth. That is the exact opposite of what was claimed. If you really had that money, had it invested and could even borrow against it (like a real asset) the amount of wealth in the USA would probably be at least double for the middle class. Also, if you happened to leave this planet at age 64.9 your heirs could inherit it, like real wealth.

4. There is no fiduciary responsibility in the fund. It is not a matter of being "well run". It cannot be run by law. It is allowed only one investment, treasuries. It is also stealable by the rest of the government since the Johnson administration (a Democrat!). If S. Sec. was allowed to invest like a real fund it would be much better off...but then the whole nature of it would change, anyway.

5. It is an honest to God ponzi. That is precisely what it is. Each generation was presumed to be larger than the next, just like the tiers of a ponzi. We screwed it up by living longer and not having four kids per family like the 1940's. However, it has never been anything but a money transfer.

6. The disability portion was added later. I cannot remember but I think that was the 1960's, too. It was never funded or priced in, either...kind of like Obamacare not being able to price risk or Bush not charging Medicare for a new benefit. (See #4).

We are the f-ing idiots because we continue to tolerate it and 75% of the population prefers the lie to the truth and reelects the liars. In fact, historically if you even tried to reform it, you were doomed. The reforms that are most likely such as means testing and uncapping the tax are still more government failure type reforms.

Milton Friedman had the right idea and the only reform that should be done. Each person has an expected benefit. That benefit can be bought out or replaced with a private annuity. Personally, I would offer all Americans an annuity or cash settlement at roughly 80% of the full value. You know 99% of people would take the money and run. It would solve about ten problems at once.

Has anyone heard the plans of any of the R-candidates? I have not. S. Sec bankruptcy, Obamacare and the general corruption of the government is going to kill us all. IN fact, financially the USA would really like it if everyone would kick the bucket right at age 64.99. So, you had better start testing your Metamucil for government weapons grade arsenic, soon.

Moe Howard's picture

You must have been under a rock. The Supremes called it a tax way back in the day.

Did you think the Patriot Act was about being Patriotic or the Affordable Care Act was about cheap health care?

graspAU's picture

Correct. Same from the people who designed it and administered it. Social Security is only a tax. It is not insurance, there is no contract, there is no account with the tax taken being held for you. The payments are defined as gratuities from Congress. That's all they are. I prefer to call them one of the many forms of anti-riot payments, in this case, to keep the old folk from rioting.

In 1953, a subcommittee of the House Ways and Means Committee conducted hearings for the express purpose of settling the question of whether social security was contractual in nature; see Hearings of November 27, 1953 entitled "The Legal Status of OASI Benefits," (Part 6). The witness at the hearing was Dr. Arthur J. Altmeyer, who held several offices in the Roosevelt administration. He was a member of the first Social Security Board, and by 1946 became the Social Security Commissioner, retiring in 1953. During this hearing, various parties stated that social security was not a contract:

At page 918:

"Mr. Altmeyer: * * * There is no individual contract between the beneficiary and the Government.
"Mr. Dingell: Congress knew that, did it not?
"Mr. Altmeyer: Yes, of course. I am sure it did.

* * *
"Chairman Curtis: The individual * * * has no contract? Is that your position?
"Mr. Altmeyer: That is right.
"Chairman Curtis: And he has no insurance contract?
"Mr. Altmeyer: That is right."

At page 937:

"Chairman Curtis: We came to an agreement on one of our major premises, that this was no insurance contract, and the words did not come from me. They were volunteered by Mr. Altmeyer."

At page 968:

"Mr. Winn: * * * Mr. Altmeyer, there being no contractual obligation between the Government and the worker, it follows, does it not, that the benefit payments under title II of the Social Security Act are merely statutory benefits which Congress may withdraw or alter at any time?"

At page 969:

"Mr. Winn (reading): ‘These are gratuities, not based on contract * * *. Moreover, the act creates no contractual obligation with respect to the payment of benefits. This Court has pointed out the difference between insurance which creates vested rights, and pensions and other gratuities, involving no contractual obligations, in Lynch v. United States, (292 U.S. 571, 576-577)."

At page 994:

"Mr. Altmeyer: I have answered your question, sir. If you will refer to section 1101, you will find, as you read into the record, that there are no vested rights, that Congress may create different rights * * *."

At page 996:

"Mr. Winn: We have also established that there is no insurance contract between the Government and the worker within a covered wage whereby the rights and obligations of a party are set; that is correct, is it not?

"Mr. Altmeyer: No. You did not establish that. That has been self-evident since the law was passed in 1935."

At pages 1013-14 (the Chair's concluding remarks):

"Chairman Curtis: Mr. Altmeyer, it is apparent that the people of the country have no insurance contract. That does not mean that I do not want to do my full part to do justice to them and to carry out and make good on the moral commitment that has been made to them. Yet, notwithstanding the fact that they had no insurance contract, it remains true that the agency under your direction repeatedly in public statements, by pamphlets, radio addresses, and by other means, told the people of the country that they had insurance. I think a number of people were misled by that."

Back in 1976, in a Joint Economic Committee hearing, Senator William Proxmire was engaged in a question and answer session with then-Commissioner of Social Security James Cardwell.  This was the conversation:

*

Senator William Proxmire: "...there are 37 million people, is that right, that get Social Security benefits?"

     Social Security Commissioner James Cardwell: "Today between 32 and 34 million."

     Proxmire: "I am a little high; 32 to 34 million people.
Almost all of them, or many of them, are voters. In my state, I figure there are 600,000 voters that receive Social Security. Can you imagine a senator or congressman under those circumstances saying, 'We are going to repudiate that high a proportion of the electorate?' No.
     "Furthermore, we have the capacity under the Constitution, the Congress does, to coin money, as well as to regulate the value thereof. And therefore we have the power to provide that money. And we are going to do it. It may not be worth anything when the recipient gets it, but he is going to get his benefits paid."

     Cardwell: "I tend to agree."

*

Senator Reed asked the sitting Federal Reserve Chairman Alan Greenspan if he still believed that we should maintain the fundamental principles of Social Security?

 “I believe that we should maintain the principles of Social Security, but I think the existing structure is not working. Until we construct a system that creates the savings that are required to build the REAL assets, so that the retirees have REAL goods and services. We don’t have a system that is working.

 We have one that basically moves cash around and we can guarantee cash benefits as far out and whatever size you like, but we cannot guarantee their purchasing power. Do we have the material goods and services that people will need to consume, not whether or not we pass some hurdle with respect to how legal financing occurs. Financing is a secondary issue and it is a means to create the REAL wealth, not an end into itself.” -Alan Greenspan 2005

 

Oldwood's picture

We all know what it is. What I want is for them to CALL it what it is. A fucking tax.

And as far as the contract is concerned, no I suppose I don't have a copy of it...but they do, and they have assured me that if I don't live up to my part of the "contract" as they read it, I will be punished. We waste words for what is.

And yes, I fully realize the futility and delusions of my demands.

sandhillexit's picture

Wow, Stuck-on-Zero, who is that one, lonely downvote?  an intern in the basement of the Rayburn Building?  

Soc Sec Trust Fund backstops all that paper sold to China.  They would love to raise taxes to reassure the Chinese.  Ain't going to happen.  Can't raise interest rates to attract foreign investors.  Can't raise taxes.  Too many deer hunters in PA and WVA.  

 

nuubee's picture

No. I was mentally prepared to have zero social security for myself nearly 10 years ago now. Doesn't mean I was financially prepared, but hey, there's always a smith-and-wesson retirement for that day.

European American's picture

If everyone used a "Smith & Wesson" to "retire" the politicians and bankers making these decisions, then maybe...

gaoptimize's picture

I have liberal relatives in their 50's that repeatedly and thoughtlessly spout the Actuary's line (lie) "Even if current challenges to the system remain unresolved, SS will still be able to pay 75% of benefits in 2030 and beyond."  What these fools do not understand is that inflation is running far above that acknowledged and COLAd by SS, and these projections of amounts and dates have always been optimistic, insolvency dates being adjusted forward every few years as payrolls fail to expand and interest rates paid to the trust fund fail to increase as modeled.  They are screwed.