New Legislation Proposes To "Bail-In' Social Security

Tyler Durden's picture

Submitted by Simon Black via SovereignMan.com,

It was only a few weeks ago that I told you about the government’s annual report on Social Security.

It was a veritable death sentence for the program.

The Board of Trustees for Social Security (which includes the US Treasury Secretary) wrote that major parts of the program have already run out of money, and the rest of Social Security will run out of money in the next decade.

Amazing. Even Social Security knows that they’re bankrupt and unable to keep their promises to taxpayers.

This is going to cause an unbelievable crisis in the United States.

Think about it: half of Americans have ZERO retirement savings and will be fully dependent on the Social Security once they retire.

But by the time their retirement comes, the program will have likely already run out of money.

Well, the government has figured out a solution. And it’s genius.

Two weeks ago a new bill was introduced on the floor of Congress that, just like all the other really dangerous legislation, i.e. USA PATRIOT Act, this bill has a catchy acronym.

It’s called the SAVE UP Accounts Act, which stands for. . .

. . . “Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act”.

I just tasted vomit in my mouth.

In short, SAVE UP mandates certain employers and businesses in the United States, including many small businesses, to start contributing a fixed amount of money per employee into a brand new national retirement fund.

Based on the contribution requirements and the average wage in the United States (about $50,000 annually), the bill is slapping a 2% wage tax on employers.

Funny thing, employers are already paying 6.2% to Social Security.

So an additional 2% tax effectively constitutes a 32% proportional increase.

This idea is such a classic example of government thinking.

Social Security is failing and will be unable to keep its promises to taxpayers in the next decade.

So there’s a pretty convincing track record suggesting that government-managed retirement funds are a very bad idea.

And yet the best solution these people can come up with is to raise your taxes, steal more money, and establish a brand new government-run retirement fund.

Their logic is unbelievable: “If at first you don’t succeed, keep trying the same loser tactics.”

Sadly, SAVE UP is not isolated.

A similar bill was introduced in the US Senate a few months ago.

The Senate version aims to create an “American Savings Account”, i.e. another national retirement fund to be managed by the government.

Then, of course, there’s President Obama’s “MyRA” program, where workers contribute a portion of their paychecks to a retirement account managed by the federal government.

And MyRA has already been launched.

(The SAVE UP bill, by the way, could also make it mandatory for a business to sign up all of its employees for a government MyRA account.)

The trend here is pretty clear.

Social Security is rapidly running out of cash, and they’re solving the problem by having American citizens and businesses essentially “bail in” the program with higher taxes and more contributions to government retirement funds.

And this is just what’s happening right now, at a time when very few people are paying attention to the problem.

Just imagine how much more they’re going to steal once the looming Social Security bankruptcy becomes front-page news in a few years.

Right now time is on your side. They’re not going to unveil any hideous new program tomorrow morning.

But there are two key lessons to take away here:

1) It’s imperative to consider these long-term “bail-in” implications and structure yourself accordingly.

 

The more assets you keep within a bankrupt government’s jurisdiction, the more likely you are to become a victim of future taxation and confiscation.

 

2) You absolutely cannot depend on the government for your retirement.

 

These programs are going broke. That is not a sensational statement. It is a direct representation of the facts as they have been laid out by the Treasury Secretary of the United States.

Again, time is on your side.

If you invest it wisely, you can develop the skills to supplement your income in retirement (for example, how to generate extra income online), and how to manage your finances to generate higher returns while taking less risk.

Education is the greatest tool we have to solve this retirement problem… as long as you start early.

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Shizzmoney's picture

Don't worry, libertarians, 3rd Way Dems, and Wall St: once Hillary is elected via the Illuminati fix, she'll cut Social Security and get it ready for complete privatization where yuou can all then trade on it and rape....I mean, reap the benefits.

 

Boris Alatovkrap's picture

Why are you make bad mouth of Libertarian!?

N0TaREALmerican's picture
N0TaREALmerican (not verified) Boris Alatovkrap Jul 26, 2016 3:51 PM

Because they "think" like children.

The libertarians and theoretical-socialist can't admit (because of their fantasies) that half the population are below average dumbasses and simply prey for the smart-n-savvy people.

Government needs you to pay taxes's picture

What's another 2% between friends?  OTOH, an incremental wage tax will drive MORE jobs overseas/push more processes to automation.  So . . . SCORE . . . more people collecting the full FREE SHIT PACKAGE.  At least the EPA will be happy.  Less people driving to work, running AC in the summer, etc.

Never One Roach's picture

How about Obama and Hillary stop importing millions of illegals and rapefugees that we have to support?

 

That would be a start. Then cut entitlements on programs where the beneficiary hasn't put a dime into. Like EBT comes to mind and Section 8 housing.

 

Do I get nominated for Nobel Prize for these novel ideas?

Boris Alatovkrap's picture

But, but, but, where will liberal political machine get new voter? Where will SSA form new income base with Amerikansky decline of reproductive proclivity?

NoDecaf's picture

Simon says - learn how to make 7000/month from your moms basement as a hedge against social insecurity.

Implied Violins's picture

Don't bother trying to make crusty sock puppets. The market's already flooded.

Boris Alatovkrap's picture

You are speak of crusty sock? Boris is recently move couch when fat lazy nephew is go to refrigerator and is find veritable cache. Where is market for crusty sock? Maybe is sell on eBay?

cheka's picture

100 plus trillion on dc balance sheet - a lot of it bought/maintained with ss funds

sell some of that sh-t and put the money back

problem solved

Implied Violins's picture

I'd say try the sock market, but avoid high frequency traders...

Theosebes Goodfellow's picture

~"Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act"~ ????  

How about Genuine Ounces of Long Durability savings account in your safe?

Maybe the Solid Ingot Longterm Viability Economy Reserve?

These cut out the middle man, (the government), and rewards those with enough initiative to plan for their future. Everyone else can go fuck themselves.

I'd be totally in favor of Uncle Sam selling American-made, high-quality personal safes at cost to all Americans to encourage them to "acrrue their future in their own home". It could even have a compartment for a firearm to encourage citizens to defend their own 2nd Amendment rights at the same time! How about that for a win-win?

 

Stackers's picture

Is there a Federal Bureau of Acronyms or something ?

Theosebes Goodfellow's picture

Yeah, I didn't get SAVEUPAA either. What's an UPAA? Any relation to a downer?

Bohm Squad's picture

Oddly enough in this case, the two are directly proportional.

tricorn teacup's picture

Any safe supplied through the current federal goobernment I'd be worried about a master key "back door".  You put everything portable of value in the safe, they have a direct path to take it.

Billy the Poet's picture

I haven't been raped yet. Not by foreigners, anyway.

Transformer's picture

How come no one ever mentions in these articles and the subsequent comments that the Congress stole all the social security funds?  That's right, they took it and spent it on other programs.  $2.6Trillion.   Social Security would be funded for  quite a while with that.

 

divingengineer's picture

By law, after annuities have been paid out Congress can jam their greasy ham-fists into the money every year. 

Yes, $2.6 Trillion reverse amortized would have put us on a very different path.  Hope they spent it or real important stuff, cause they wrecked our country and millions of peoples futures for it. 

TBT or not TBT's picture

Trust funds are by their nature trustworthy. Half or more of the population believes that, anyway the government can always just make more money.

BetweenThe Coasts's picture

Social Securiy taxes became part of general funds available to "balance the budget" during the reign of Clinton1. Converting any of those special Social Security -non interest bearing- Treasury bonds to income for SS receipients requires raising taxes because the money has been spent already on other stuff like war profiteering and congressional fact finding trips to vacation destinations. How about we clawback some of those monies?

newdoobie's picture

Correction

The Social Security Act specifies that the monies in the fund may "be invested in securities backed by the full faith and credit of the Federal government," such as treasury bills, treasury notes, and treasury bonds, as well as special issue bonds. So, essentially, the government can "invest" Social Security funds by lending them to itself, then spending that money on programs not related to Social Security (e.g., defense, foreign aid, education). This has always been the case.

fixed it for ya

Jethro Dull's picture

The Tylers posted the actual govt. spreadsheet, during, the last few years of the Clinton Administration in an article a few years ago. Far be it for me to do analysis with the bright minds on here. But, my take, was, they effectively double counted surplus inflows Clinton's last 3 years. And, the surplus, in effect, was, already double counted. So, that acutally made for thriple counting some of the surplus revenue. Right?

 

cheka's picture

exactly!  sell some of the assets and put the money back!!

BeanusCountus's picture

That's exactly what they do. Which then becomes outstanding debt held by non-government agencies and will then have to be included in published "debt to GDP" ratios of US. This is what they fear because when all of it is "transferred" to "outstanding" it shows we're broke. Like Greece. So you see, its not really an "asset" they are selling. It's really just an existing debt that has yet to be recognized in calculating how broke you are.

The trust fund is a sham. A perfect example is if you borrowed a million from your brother and spent it, but you didn't have to include it in your outstanding debt because he is a related party. Then your brother sells your debt to an outsider that you now have to pay. Presto, you immediately have to include it in your net worth calcs for the first time. Get it?

logicalman's picture

They sqandered all the money they stole, so they need to steal more???!!!

Wake The Fuck UP, people.

 

SweetDougisaTwat's picture

That guy with the nose that looks like a penis--uh, Bill.  Yeah, well he was the first one to "borrow" from the Social Security fund.  With an IOU.  It has never been paid back.

All Risk No Reward's picture

Hi Billy, yes you have. They just haven't sent you the bill yet. They will.

any_mouse's picture

I like Brookville. I don't think many refugees will reach there.

nightshiftsucks's picture

Just wait for the stanic UN,they will be happy to rape you.

Billy the Poet's picture

I was told that Obama is importing millions of "rapefugees." Why should I have to wait?

JamesBond's picture

Isn't paying one retiremet scheme with money from another retirement scheme called something?.....  starts with a p....

True Blue's picture

I think he meant something that rhymes with Fonzie -heyyy.

But no worries; I am sure all these accounts will be 'wisely' invested in T-Bills and other government debt instruments/"assets" so the fiat/debt party can keep EBT and other freeloading pogroms going for another few months.

On the other side of the coin: if people like Jesse Jackson Jr. weren't collecting $7,500 a month from SSDI for the 'disability' of being caught out as a crooked, corrupt, swindling Zimbabwe-esque political hack...

Boris Alatovkrap's picture

Boris is love Arthur Ponzarelli, is watch popular Amerikansky cultural phenomenon in 1980s over prohibited satellite signal. Is much enjoy foible and particularlity of Mr. K and Kunningham family, but everyone is know this is Amerikansky propaganda like Poytemikin Village. Favorite is when Ponzi is jump shark tank, but Boris is break satellite dish connection and is miss Part II, is Ponzi surviving?

laser's picture

Fonzie's making $7500. a month selling reverse mortgages.

Colonel Klink's picture

I bet that jew is making more than that off of them.

N2OJoe's picture

What's it called when the 1st scheme itself is a... Fonzie?

logicalman's picture

It pretty much all comes down to fiat.

Imagine a scenario....

'Real' money - based on something tangible and hard to get hold of instead of something conjured out of thin air.

Money is truly a store of labour.

Inflation is non-existent, due to the fact that money is tangibally backed.

Keeping the math simple..

Start work at 20

Save half of what you make and retire at 60

With no inflation, you'd be good for the next 40 years at the same lifestyle you had when working.

If you croak before the century, your kids get what's left.

Troule with this idea may have something to do with thieving banksters, I think.

 

 

OverTheHedge's picture

The only issue that I can see with your scheme is that there is no allowance for eating. Given that the government's of most countries take half or more of workers salaries (you need to tot up all the taxes, including the more hidden ones), you have already run out of cash for food. Somewhere to live, mode of transport etc, and the deficit is huge. I see credits card debt in your future. Might it not be easier to not save, and just borrow in retirement? Leave the debt for the next generation? What could possibly go wrong?

Edit: whilst I understand the rules for apostrophes, it would appear that my Amazon-powered tablet does not. With the new zerohedge format, I can't actually see what I am typing, and editing is a nightmare, so apologies to all apostrophe Nazis get upset by mis-applied apostrophes. Here's one I found lying about unattended:feel free to borrow it if you have a need.

 

'

Okienomics's picture

Okay, Logicalman, puzzle me this.....

"Same lifestyle you had when working..." does mean your 60 year old lifestyle or your 20 year old lifestyle?  Cause' they're not even close to the same, ESPECIALLY when a young couple is trying to raise kids while dedicating half (HALF!) their income to shiny objects.  Your math probably wouldn't work for a couple of 25 year olds raising kids, but hey, why question a lovely and logical narrative with "thieving banksters" as the big bad wolf and reason number 273 to not bother because the deck is stacked and the dice are loaded.

Kids, if you're listening, apply yourself diligently, work hard, dedicate a partion to savings and diversify across asset classes including real money.  It will serve you well, regardless of any discouragement you may incur.  The world is ripe with opportunity RIGHT NOW.  Put down your SJW sign and seize the day.  

Offthebeach's picture

Unless you have a real skill, tben you can dump the FedReserve.gov tax and provide lower cost service and pocket way more. Think of it as "OnShoring".

I'm down in West Palm. Take my bud to pick up his fixed car. Good work, friendy, great price. Place is old style gas station, 3 bays, small office, roof over where pumps used to be. Lots of cars. All three bays filled. Back story? Three retired bored wrenchturners monthly lease station which is uneconomic. Cash. Rolled in their old tool boxes. Work only for cash.

AGuy's picture

FWIW: My understanding is that the House will pass a 2% payroll tax right after the November elections.

Here another proposal:

http://www.plansponsor.com/Bill-Would-Preserve-Social-Security-Another-7...

The bill would gradually increase the payroll cap to $156,550 in 2017, and to $308,750 by 2021. It would change the formula used to calculate benefits of high earners from 15% to 5% over five years, or 2% a year from 2017 to 2021. Starting in 2022, full retirement age would increase from 67 to 69.

[I don't think increasing the SS cap is going to help much since there are few workers making above the existing cap. Perhaps they will get a few hundred million extra in payroll taxes, unless Inflation takes off]. It appears that anyone they consider a "high income earner" will get sqaut for SS (ie mean testing). This appears to be an RNC proposal].

 

 

Dwain Dibley's picture

You what's really funny about this whole SS farcical charade?

It's a fiat (legal tender) monetary system and the U.S.G. owns the fiat.

If they really wanted to, SS could simply create the credit to make the payments based upon the securities it already holds, much in the same way banks generate credit off the Treasuries they hold.  Direct deposit would make the process easy.

Plus, the U.S.G. is sitting on over $9.6-Trillion in foreign debt so it's not like they're gonna go broke any time soon. 

All Risk No Reward's picture

>>You what's really funny about this whole SS farcical charade?

It's a fiat (legal tender) monetary system and the U.S.G. owns the fiat.<<

No, what's sad is that you have no idea how money works in the world. The USG doesn't own the money... they outsourced it to a private cartel of PRIVATE INTERNATIONAL BANKSTER WHO LEND IT BACK TO GOVERNMENT AT INTERESTS. More on this fact and its ramifications at the end of this post...

>>If they really wanted to, SS could simply create the credit to make the payments based upon the securities it already holds, much in the same way banks generate credit off the Treasuries they hold. Direct deposit would make the process easy.<<

But the Banksters don't want to... they've set up a debt-money ZERO-SUM GAME by design... creating a Ponzi scheme destined to implode in the public's face and allow the Bankster corporate fronts to bankrupt the masses and asset strip thing - world control through inextinguishable debt - EXACTLY as Henry Ford stated.

>>Plus, the U.S.G. is sitting on over $9.6-Trillion in foreign debt so it's not like they're gonna go broke any time soon.<<

Because possession of inextinguishable debt is wealth in the "new normal."

Inequality: Why are the rich getting richer?
https://www.youtube.com/watch?v=ZzCegQVljdY

Debt Is Not a Choice
https://www.youtube.com/watch?v=juQc0rLdB-E

How To Be a Crook
https://www.youtube.com/watch?v=2oHbwdNcHbc

Renaissance 2.0
https://www.youtube.com/watch?v=96c2wXcNA7A

Debunking Money
https://www.youtube.com/watch?v=7_yh4-Zi92Q

Krugman to Lietaer: "Never touch the [debt-]money system!"
https://www.youtube.com/watch?v=Q6nL9elK0EY

"Didn't they (MIT economics professors) tell you, never touch the money system!"
~Paul Krugman

"You are killing yourself academically if you touch the money system."
~Paul Krugman

“If history shows anything, it is that there's no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt—above all, because it immediately makes it seem that it's the victim who's doing something wrong.”
~David Graeber, Debt: The First 5,000 Years

"The secret of life is honesty and fair dealing. If you can fake that, you've got it made."
~Groucho Marx

Dwain Dibley's picture

What's really funny, stupid fucks who believe bank debt is their money because some video said so.

All Risk No Reward's picture

Hi Dwain, you've either straw manned my position, you don't understand my position, or you are delusional.

Or maybe some combination of the above.

Except for specie, money IS the debt-receipt portion of the debt-generated money process. It is a double-entry bookkeeping adjustment.

That is how the system works outside your delusion... not because a video said so, genius.

And this tyranny is well beyond the Constitution having any validity... it has been "might makes right" longer than you've been alive.

Get your facts right and learn some manners lest you continue to embarrass yourself in public.

BTW, with what exactly do you pay your rent, mortgage, and property tax - please be specific.

I might even agree with your word play in principle, but when billions of people use the debt-money receipts as money on a daily basis, you come off as a complete d* acting like the idea is absurd... and anyone who thinks Federal Reserve Notes can buy goods and services is a dumb *ss... when billions of people do it every day... absurd... but reality...

Have we been conned? Absolutely! But the government is part and parcel to the con... they FORCE us to use the debt-receipts as money... and they've taught most to be puerile and rude, too.

As for the award for under utilizing one's intellect... that goes to people who still think the law actually matters... or has in their lifetime. Selective enforcement to the benefit of the ruling Debt-Money Monopolist oligarchy. Read Section 2A of the Federal Reserve Act and then look at the actual data showing exponential growth of credit and monetary aggregates relative to the monetary output of the country as measure by GDP. 30 years of criminality... no penalties...

I have news for you, you don't live in a Constitutional Republic. You don't even live in a democracy.

You live in a Debt-Money Monopolist Mega-Corporate Fascist Empire system cloaking itself as a free democracy (it ain't, and it should be a Constitutional Republic, anyway.).