Social: Yes – Secure: NO
by Virginia Raines
Recently, I became aware that there are any number of people who state categorically that there “is no Social Security Trust Fund”. At the time, I suggested that perhaps what they meant to say is that there were no actual funds in the Fund. I received feedback to the effect that many of these people did not believe there was a Fund, did not believe there were trustees, did not believe it was an insurance program, etc. At that time, I did a search on the net to find information which explained who the Trustees are, and I also mentioned a death benefit paid for my father, for instance (a type of insurance). I also provided links to articles which explained this in more detail. Again, I explained that it appeared to me that there is a Fund, but it didn’t have any money in it.
This explanation was still criticized, which I will not try to detail other than to say that someone informed me the 1935 legislation did not set up a trust fund and that payroll taxes don’t go into a fund, nor are benefits paid from a trust fund. It is hard to knock someone’s assertions when even Robert Novak is claiming in an article that a congressman confessed that there is no fund.
Without attempting to recreate all the statements that were made at that time, I am going to try to illustrate what I believe is the correct understanding of the taxation and fund, and I will provide backup links and portions of articles at several websites. Please read this material without any predetermined biases. If this does not satisfactorily answer the question, “is there a Social Security Trust Fund?”, would you please let me know? More importantly, if it seems that I have misunderstood the scheme, I would appreciate being given a better explanation that addresses all the points that will be made below. This is absolutely not intended to explain all the reasons WHY a social security scheme was foisted upon the public, or the misrepresentations made to the public at the time, which are entirely different issues.
I am only going to include certain portions of the articles; each one can be read in entirety at the links. In any event, it should be amply clear by the time you get to the end that the actual problems with the SS system scheme are many times worse than even the most vocal critics usually tell us.
[First of all, it is important to understand that the 1935 legislation did not establish a trust fund. The trust fund was established several years later, in the Social Security Act amendments. In 1935, it was an account, and it was for retirees and survivors, hence the “insurance” aspect.]
First Annual Social Security Trust Fund Report – 1941
The Federal old-age and survivors insurance trust fund was created pursuant to section 201 of the Social Security Act Amendments of 1939, approved August 10, 1939. This trust fund became effective on January 1, 1940, and superseded the old-age reserve account established under the Social Security Act of 1935. The trust fund is held by a Board of Trustees composed of the Secretary of the Treasury, the Secretary of Labor, and the Chairman of the Social Security Board, all ex officio. The trust fund so held is available for the payment of old-age annuities and survivors insurance benefits and the necessary expenditures incurred by the Social Security Board and the Treasury Department in the administration of the program. The Secretary of the Treasury is designated as the Managing Trustee.
[Note that it does not state the payroll taxes go directly into the fund, nor that benefits are paid directly out of the fund. I don’t have handy an article which explained that the original 1935 bill was not called Social Security Act, but it was changed at the behest of FDR, if I remember correctly.]
Resources made available to the trust fund included the securities held by the Secretary of the Treasury for the old-age reserve account, accounts standing to the credit of the old-age reserve account on the books of the Treasury as of January 1, 1940, and interest on the investments. The appropriation to the trust fund for the fiscal year ending June 30, 1941, and for each fiscal year thereafter, are required by section 201 of the Social Security Act, as amended, to be equivalent to 100 percent of the taxes (including interest, penalties, and additions to taxes) received under the Federal Insurance Contributions Act and covered into the Treasury. Interest on and proceeds from the sale or redemption of any securities held by the trust fund are required to be credited to the fund.
[In other words, the appropriation to the fund is from Congress and is not going to be identical in amount to payroll taxes collected, though it is mandatory that it not be less than the taxes collected. It is adjusted from time to time. The appropriation is prospective, based on anticipated taxes to be collected. However, as will be seen, even at this time, collections were set to be higher than payments in order to accumulate (ha!) a balance for the time when collections would not keep pace with payments to eligible recipients.]
The Social Security Act Amendments of 1939, creating the old-age and survivors insurance trust fund and establishing the Board of Trustees, made other significant changes affecting the financing of the old-age and survivors insurance program.
The old-age and survivors insurance trust fund provides a financial margin of safety for the system against the first impacts of unforeseen changes in the upward trend of disbursements as well as against these short-term fluctuations and contingencies.
[In other words, taking in more “contributions” than is being paid out is supposed to provide safety for the system for unforeseen economic times as well as when the number of recipients increases significantly in proportion to workers being taxed.]
At the end of June 1940 approximately 50 million persons already held social security account numbers and about 42 million workers had made contributions toward benefits under the system. In the future, millions of additional workers will come under the program as they obtain jobs in covered employments. Most of the rights now being accumulated toward benefits by these contributors and insured workers will not mature for many years.
[Okay, this kind of statement way back in 1939 makes it pretty clear that people are not “investing” in their own retirement plan. They are making contributions toward benefits, if they are in covered employments, and they are given rights toward benefits as a result.]
Consequently, benefits under the program are expected to increase markedly over a long period. This results from the fact that larger numbers of workers will be eligible and will qualify for benefits and from the expectation that the proportion of the population in ages 65 and over, estimated at 7 per-cent in 1940, may eventually rise to perhaps 14 to 16 percent. Hence the essential assurance of future financial soundness of the system, with its rising rate of disbursement, rests on a graduated increase in contribution rates or provision of income from other sources, or both.
[So, it has been understood since virtually the inception of SS that this problem will become manifest.]
[Table 1 in the article shows that receipts to the olf-age reserve account from 1937 through 1939 are almost entirely “transfers from appropriations”. In other words, congress appropriates the funding, it does not come directly from payroll taxes.]
Since it was necessary under the 1935 act to estimate appropriations in advance of tax collections, a flexible procedure was adopted. Transfers to the old-age reserve account from the appropriations credit were made monthly. These transfers were periodically adjusted to tax collections.
[This is the acceptable explanation as to why payroll taxes are not deposited directly into the account, or later the fund. Arguments as to the constitutionality of the tax aside, the procedure does not permit the claim that there “is no SS trust fund” merely because the collections aren’t deposited directly into it.]
In addition to the appropriations transferred to the account, the other source of income was interest on investments held by the account. The earnings on investments increased from $2.3 million in 1937 to $27.0 million in 1939, reflecting the increase in the assets of the account.
Throughout the first 3 fiscal years of the program, disbursements from the account consisted exclusively of lump-sum payments to the estates of deceased insured workers and to persons reaching age 65.
[Which should answer the question whether there is an “insurance” program involved, regardless of how one argues about what an “insurance program” should look like.]
The amounts in the account not needed to finance current withdrawals were invested by the Secretary of the Treasury as prescribed in the Social Security Act of 1935. The investments of the account were exclusively in special issues of Treasury notes bearing the 3-percent interest.
[So, we have already entered the world of fictional “investing” in which tax collections are “invested” in government securities, which can only be repaid by some other source of federal revenue — which is usually another round of taxation.
In case you haven’t realized it, this is the reason I have made an effort to follow up on the arguments about whether or not there is a trust fund in the first place — because in doing the little bit of research on the net about the subject, I suddenly realized that the country faces a bigger problem than whether or not a trust fund “really exists”. It does. It was created. And since 1939, there have routinely been collections and revenues that exceeded payments. But what is in the trust fund? Government IOUs. How are government IOUs paid off?
Get it? Since 1939, people have paid in (been taxed) more than is being paid out on the theory that this was creating a surplus which would be available when more benefits were being paid out than were being collected. I won’t even try to find a report for each year to show the numbers. The concept was in place almost immediately upon creation of social security, because even then it was understood that income needed to exceed costs, which were going to go up over time.
If all the excess payroll taxes collected since the ’30s have been “invested” in government securities, then there is only one conclusion to be made. It is far worse than the usually complaint that SS funds are used to mask deficit federal spending. In fact, it is far-far worse. Not only will the federal government have to come up with some way to redeem those IOUs (which one might assume will have to come from another round of taxation, to pay off funds that were “invested” in government paper, but also we are facing the fact that the unfunded liabilities of the SS system are huge. Later, you will see one statement that it amounts to four times the national debt. Sit down, take some breaths of oxygen deficient air and take in the ramifications of that scenario. Yet the government takes people to jail if they don’t properly account for their future liabilities.
If this isn’t clear — if I haven’t understood and explained it properly — you will probably figure out the whole thing if you will finish reading the rest of the material.]
Summary of the Operations of the Trust Fund, January 1 to June 30, 1940
The Federal old-age and survivors insurance trust fund came into existence on January 1, 1940, as required by the Social Security Act Amendments of 1939. A statement of the operations of the fund from that date to June 30, 1940, is incorporated in table 2. This statement also shows the assets of the fund at the end of the fiscal year 1940.
Receipts of the old-age and survivors insurance trust fund from January 1 to June 30, 1940, included the securities held by the Secretary of the Treasury for the old-age reserve account, and the amounts standing to the credit of the old-age reserve account on the books of the Treasury on January 1, 1940, including the unexpended 1940 appropriation balance.
[In other words, everything that had been going on since the creation of social security was now folded into a more refined scheme. The old-age reserve account went into the trust fund, for instance. Again, there is mention of the “appropriation balance” which alludes to the fact that money for these activities is appropriated — it doesn’t come directly from deposits of payroll taxes collected, nor is the theoretical amount in the trust fund matched to payments. The only minimum requirement seems to be that the appropriation must be at least the amount that collections are expected to generate.]
The total fund is available, as needed, for benefit payments required under title II of the amended act, and for reimbursements for administrative expenses. Benefit payments are paid out of the fund [?] by the Managing Trustee, in accordance with section 205(I) of the Social Security Act, as amended, upon receiving certifications from the Social Security Board. Total benefit payments made from January 1 to June 30, 1940, amounted to $9.9 million.
[I don’t know if it is accurate to state that benefit payments are paid “out of the fund”. It appears that perhaps payments are made from the Treasury, but not necessarily directly by the fund. It would seem unlikely that the fund distributes payments, and critics claim that payments don’t come from a SS trust fund. That criticism is minute compared to the overall scheme, however, and does not negate the reality of the fund or the mechanics involved.]
The 1939 amendments provide that the Managing Trustee shall pay from the trust fund for each 3-month period the amount of administrative expenses, as estimated by him and the Chairman of the Social Security Board, of both the Treasury and the Social Security Board under titles II and VIII of the Social Security Act and the Federal Insurance Contributions Act.
[Again, it doesn’t precisely detail the process but does state the payments are “from the trust fund”. It is based on estimates, and thus would have to be adjusted regularly. But it doesn’t explain to whom or where the payments are directed.]
The assets of the old-age and survivors insurance trust fund as of June 30, 1940, were $1,744.7 million.
[A more or less unambiguous statement that there was a trust fund. In this case, as mentioned before and explained further below, the “assets” are not assets in any real sense of the word according to standard accounting principles. It is my opinion that this is the origin of the real depiction of the SS trust fund as a trust without funds. It exists as an entity, it was created, it has trustees, there are procedures by which they are to operate. But there aren’t any funds in the trust fund. That part is the reality, no question.]
… throughout the initial period taxes exceed benefits. This would result in a fund accumulation which provides interest earnings to meet a portion of the current benefit payments.
[As mentioned earlier, even at this early stage, it was recognized that there would be a problem with payouts exceeding the payroll taxes. The idea that “interest earnings” — which were supposedly derived from “investing” tax revenue excesses in government IOUs — was a temporary scam that continues to this day.]
On the basis of present estimates it is apparent that during the ensuing five fiscal years the trust fund will exceed three times the highest annual expenditures anticipated during that five-fiscal-year period. This condition is reported at this time to the Congress in accordance with section 201(b)(3) of the Social Security Act.
[Remember, this was way back when.]
The essential function performed by the old-age reserve account have been taken over by the new trust fund. These functions are strengthened and the interests of the beneficiaries emphasized by the modification of procedure under which appropriations to the fund are now related directly to the tax collections.
[This is why one will not find the SS trust fund in any legislation prior to 1939.]
The trust fund augmented by the anticipated income of the next five fiscal years is ample to assure the payment of benefits and administrative expenses for this period. However, the next five-year period is but the introduction to several generations during which the trend in benefits, while predictable in degree, will be pronouncedly upward.
The future benefits to which we are now committed will require large scale outlays many times greater than the level of payments in the first five years. Expected income will also be increasing, but whether or not additional income will be needed in the long-distant future cannot be determined at this time. In view of the short period during which the amended act has been in force and the magnitude of the long-range commitments of the program, the Board makes no recommendation at this time for changing the tax rates under sections 1400 and 1410 of the Federal Insurance Contributions Act.
Social Security Administration
SSA Publication No. 05-10094
May 1998 (Recycle prior editions)
The Social Security and Medicare taxes you pay are divided among several trust funds.
There are two Social Security trust funds:
the federal Old-Age and Survivors Insurance (OASI) trust fund is used to pay for retirement and survivors benefits; and the federal Disability Insurance (DI) trust fund is used to pay benefits to people with disabilities and their families.
There also are two Medicare trust funds:
the federal Hospital Insurance (HI) trust fund is used to pay for the services covered under the hospital insurance (Part A) provisions of Medicare; and the federal Supplementary Medical Insurance (SMI) trust fund is used to pay for services covered under the medical insurance (Part B) provisions of Medicare.
How The Trust Funds Work
Every day, tax revenues are deposited in the trust funds. Social Security benefits are paid from these funds, and any money not needed to pay benefits is invested daily in U.S. government bonds.
[This may or may not be considered duplicitous. The revenues “deposited” in the trust funds are obviously not directly from the payroll taxes that we are paying, nor are revenues of any sort whatsoever deposited in the normal meaning of the word. That has been touched upon already but will also be covered later. Deposits appear to be derived from appropriations and revenue from other sources, such as the presumed “interest” income from “investing” in special Treasury securities.]
The trust funds are governed by a Board of Trustees. Members are the Secretary of the Treasury, Secretary of Labor, Secretary of Health and Human Services, the Commissioner of Social Security and two public trustees who serve four-year terms.
[Yes, there are trustees. There is a trust fund. It can scarcely be properly described as “governed”, however. And as mentioned before, it has no “funds” in it.]
The Board of Trustees is required by law to report annually to the Congress on the financial condition of the funds and on estimated future operations.
[So, will all those people who say there “is no SS trust fund” please get their semantics straight. There may be common terminology versus legal terminology but there is a trust fund, it has trustees, they make reports, and it supposedly has a surplus at this time. Therefore, the future liabilities which will be laid upon the people are even worse than imagined. As I have been trying to explain thus far, the “surplus” has been “borrowed” and the only way to “repay” it is to get more money from somewhere. No matter where it actually comes from, the “money” to pay off those IOUs will ultimately come out of our pocket, in spite of the fact that the “surplus” that was “invested” already came out of our other pocket in the first place.
Now are you beginning to get a handle on how bad things really are?]
At times in the past, Social Security was financed on a current-cost basis, popularly known as “pay-as-you-go.” Some have compared that method to a pipeline, with taxes from workers flowing into one end of the pipe and payments for beneficiaries flowing out the other end.
[That is more or less the way I thought it worked till doing this research. The critic’s description is often “Ponzi scheme”, which comes a little closer than “pay-as-you-go” which term doesn’t quite capture the multiplying obligations. But we have already encountered the fact that as early as the late ’30s-early ’40s, more payroll tax revenues were coming in, along with supposed interest and other income, than were being paid out in benefits!]
Since 1983, the program has operated under a “partial reserve” method of funding. The intent is to have the system take in more than it pays out in order to build up the large reserve funds needed to help pay for the benefits of an increasing number of retired workers.
[As mentioned, the trustees way back in 1941 were already discussing and implementing such a plan.]
What Happens To The Reserve Funds
Any Social Security reserves that are not used for payment of benefits or operational expenses (which are consistently less than 1 percent of revenues) are invested only in U.S. government securities–generally considered the safest of all investments–and earn the prevailing rate of interest. These are normally special obligations issued specifically for the trust funds. The amount of interest earned is substantial. For example, in 1997, the Social Security trust funds earned $43.8 billion in interest, representing an effective annual interest rate of 7.5 percent.
[Now don’t get confused. “Reserves” is just another name for appropriations and other income credited to the trust fund which exceed the amount of payments under the scheme. Appropriations are based on anticipated payroll taxes. Adjustments are made in order to ensure that appropriations are not less than actual collections. None of this is actually deposited into the trust fund, of course. It is merely a bookkeeping entry. The “investments” in U.S. government securities are the equivalent of lending the government more money, which it has to repay with interest, and which normally depend on tax revenues or other costs to the public in order to retire. These “special obligations” are completely non-negotiable.
Furthermore, the entire scheme not only obfuscates the fact that more revenue must be raised to retire the debts owed to the trust fund, but also hides the true unfunded liabilities of the SS system, which a non-governmental entity would never be allowed to do.]
The Board reports that the Hospital Insurance trust fund will be able to pay benefits for only about 10 years. Rising health care costs and a declining ratio of taxpayers to Medicare recipients combine to place the trust fund “severely out of financial balance” in the long range.
[That’s an understatement. But, most of the cost of the medical system nowadays is due to payment schemes like Medicare and typical insurance plans.]
Are Social Security Taxes Used For Other Purposes?
A persistent, but false, rumor is that trust fund money has been used for purposes other than Social Security payments or operational expenses.
There is confusion over this issue because of the trust fund investment procedures. When you buy Treasury bonds, you are, in effect, lending money to the government to use for various federal programs and projects. The same is true for the investments Social Security makes in government bonds. The government uses the money it has borrowed from Social Security for other purposes. But just as the government pays you back with interest when you redeem your bonds, it always makes good on its obligations to Social Security, paying the trust funds back with interest.
[It is explained later that this type of rationale doesn’t hold water. In this case, government securities (IOUs) are not an asset, even though they try to treat it as such. And, as I’ve already mentioned more than once, when taxes are used to “buy” government debt which can only be retired by additional sources of government revenue — which cost must be borne one way or the other by the public — then one cannot accept the explanation that this is a true investment. In fact, the reality is that this will amount to nothing more than double taxation!!]
Monday, December 28, 1998
Trust Fund Balances Don’t Help Social Security
When Social Security runs a cash surplus the excess revenue is invested in a trust fund. By law, it invests solely in U.S. Treasury securities. These securities are known as “special issues” because they have certain features not contained in those sold on the open market to investors. The interest rate is calculated in a special way and when these special issues are sold to pay benefits the Treasury always redeems them at their face value. By contrast, private investors selling Treasury bonds often find that the price is less than the face value because market interest rates have risen.
[My constant reminder to the reader is not to be confused by the way articles like this use certain phrases, such as “cash surplus” in Social Security. There is really no cash in the SS system. This doesn’t mean that there is no trust fund, or that there is no mechanism by which debits and credits are being entered which do entail excess payroll tax collections being diverted into special issue Treasury securities. It will be all too real when those securities are supposed to be repaid to SS in order to take care of SS payments which outpace collections in the future.]
The interest received by the Social Security Trust Fund has now become a major revenue source (see figure). In 1997, it received almost $40 billion in interest from its portfolio of Treasury securities. This represented more than half of the $75 billion increase in the Trust Fund that year.
[Duh. The interest, which must be paid out of the pockets of taxpayers, is a “major revenue source” for the trust fund.]
The problem is that all of this is a paper transaction with absolutely no substance whatsoever. Even Bill Clinton admits this. As his 1999 budget puts it, trust fund assets are available to finance benefits “only in a bookkeeping sense.” Unlike private pensions, “they do not consist of real economic assets.” Rather, the trust fund simply represents future claims on the Treasury that will have to be financed by raising taxes, cutting benefits, or borrowing from the public.” The existence of large trust fund balances, therefore, does not, by itself, make it easier for the Government to pay benefits,” it concludes.
SOCIAL SECURITY ‘TRUST FUND’ RELIES ON ACCOUNTING GIMMICKS, ANALYST SAYS
Most of the money raised through payroll taxes to fund Social Security is paid out immediately in the form of benefits, writes Daniel J. Mitchell, Heritage’s McKenna senior fellow in political economy. But for more than a decade Social Security has taken in more money than it needs to pay benefits. The surplus goes to the Treasury Department, where it is spent on other government programs. In return, the Treasury gives the trust fund IOUs.
[The alert and skeptical reader will immediately spot the problems with the terminology used by Mr. Mitchell. The payroll taxes don’t literally “fund Social Security” and are not literally “paid out immediately” from same. Congress appropriates the amount credited to the trust fund based on estimates of how much will be collected. There are the hypothetical interest payments from Treasury for the IOUs. And, as clearly shown previously, SS was taking in more money than it needed to pay benefits as soon as it was created.]
“… the best possible interpretation of the trust fund is that the IOUs are a measure of how much in taxes will have to be raised in the future,” he writes.
As the administration notes in its budget for 2000, the trust fund balances “are claims on the Treasury” that “will have to be financed by raising taxes.” The U.S. General Accounting Office, the government agency that audits federal programs, labels the fund a federal “liability” that “will have to be financed by raising taxes, borrowing from the public or reducing other federal expenditures.” Several other government agencies have admitted that the fund is essentially meaningless.
[Meaningless does not equate to being non-existent. There is a big difference. A meaningless fund nevertheless is the source of claims on the Treasury” that “will have to be financed by raising taxes — a “liability”. And how did this liability come into existence? Because people paid taxes. Those taxes were not used to pay government bills — SS system obligations in particular — but were rather used in order to create more government debt! In order to retire this new government debt, we are told that the GAO states it “will have to be financed by raising taxes, borrowing from the public or reducing other federal expenditures.”.]
The Illusory Trust Funds
Every payroll tax check sent to Washington is written to the U.S. Treasury. Every Social Security benefit check is written on the U.S. Treasury. The trust funds do not collect taxes; nor do they pay benefits. They are nothing more than a lateral accounting system – totally unessential to any real activity.
Technically, the trust funds hold interest-bearing U.S. government bonds, representing the accounting surplus of payroll taxes collected minus benefits paid. But these are very special bonds. They don’t count as part of the official National Debt. The Social Security Trustees cannot sell them on Wall Street, or to any foreign investor. They can only hand them back to the Treasury. In this sense, these bonds are nothing more than IOUs the government has written to itself.
On paper, the Social Security trust funds have enough IOUs to “pay” Social Security benefits for about 17 months on any given day; the Medicare trust fund can “pay” benefits for about one year. In reality, they cannot pay anything. Handing IOUs back to the Treasury does not increase the size of Uncle Sam’s bank account one iota. In order for the Treasury to write a check, it must first tax or borrow.
…the annual report of the Trustees of the Social Security trust funds tends to focus almost exclusively on the concept of actuarial balance. This treats bonds in the trust funds as assets (the way accountants would do if they were auditing a private pension fund) and ignores the fact that every asset of the trust funds is a liability of the Treasury. For the government as a whole these assets and liabilities net out to zero.
[But this portion ignores the previous point that it was taxes which created the liability in the first place, and the public will bear the cost to eliminate the liability. This is equivalent to double taxation.]
…get on to the real problem: how is the Treasury going to pay the government’s bills?
May 4, 1998
SOCIAL SECURITY TRUST FUND REPORT SHOWS NEED FOR REFORM
Daniel J. Mitchell and Gareth G. Davis
The 1998 Social Security Trustees Report, released April 28, 1998, reveals that the retirement program is actuarially bankrupt.
According to the six members of the Board of Trustees of the Social Security Trust Fund (which includes three members of President Bill Clinton’s Cabinet):
Social Security benefits will exceed projected payroll tax collections in 2013. This annual deficit will explode quickly thereafter, climbing from $49 billion in 2015 to $684 billion in 2030.
The total unfunded liability of Social Security, adjusted for inflation, is now $17.9 TRILLION — four times greater than the national debt.
Because surplus payroll taxes have been spent on other government programs, the Trust Fund contains nothing but IOUs. To make good on those IOUs, politicians in the future will have to raise taxes or issue debt.
Even if these IOUs are redeemed, the Trust Fund will go bankrupt in 2032. This is 4 years earlier than projected only five years ago and 16 years earlier than projected ten years ago.
[Again, the term “bankrupt” may not be the most accurate term to use. The writer evidently intends to say that even if all the prior excess collections, “invested” in Treasury securities, were redeemed — and all the interest paid — then by the year 2032, it is anticipated that all surplus will have been paid out and collections will drop below payments to all recipients. The promulgation in media and government circles of an impending “bankrutpcy” does create a confusion and misconception.]
In order to keep the system solvent when the Trust Fund runs dry in 2032, payroll tax rates would need to increase by one-third or benefits would have to be cut by 25 percent.
[And this begs the issue of paying off those Treasury IOUs!!]
I’m forwarding Virginia Raines’ research on Social Security funds as the information reveals how the system was imposed via fraud, and the vulnerability of the system.
Virginia is a dedicated researcher who now lives in California. When she was still in the East, she studied with Howard Griswold and other folks in that area. She is formerly from Pennsylvania. From what I’ve seen in the past, her research is normally reliable.
Comment on article:
I think that if Virginia would obtain The November 27, 1953, Part 6 Document titled ANALYSIS OF THE SOCIAL SECURITY SYSTEM Hearings Before a Subcommittee of the COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTITIVES eighty-third Congress First Session on The Legal Status of OASI BENEFITS It will prove to her that there is NO trust fund, NO insurance, she has NO vested interest in it, it is NO contract of insurance, SS is only a STATUTORY RIGHT that can be taken away at the whim of Congress, employers SS contributions are a separate tax for the privilege of hiring employees and are not for matching the employees SS contributions, SS is STRICTLY for Government workers ONLY, The IRS considers the SS payments as “gratuities.” On page 1014 of the report is this statement which I quote from Mr. Altmeyer stating it to Chairman Curtis;
“However, I do not want to tell the people they have insurance policies when they do not. We have collected all of this money from 90 or 100 million people, and 17 or 18 years later two-thirds of our aged problem is still unsolved as far as Title II is concerned. The young people who are paying in money month after month only have a statutory right that a Congress 10 years, or 15 years, or at anytime might take away from them. Maybe it has to be that way. But certainly we should not tell them that it is insurance, because in the minds of the average American that is something valuable, it is an enforceable policy, and whoever in the Federal agency was responsible for conveying this misleading information to the American people and saying such things as “Your card constitutes a policy,” certainly was mistaken.”
Ok if it was “certainly was mistaken” then why did not Congress correct it? Because they had to cover the fraud. This report, if read by the “average American” should lead to a mass killing of Congress. But that will never happen because the dumb, stupid, ignorant “American people” love to have their rights and money stolen day after day. Slaves they are forever and ever and they don’t even realize it. They are unaware of being unaware.