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Posted on 09/10/2001 5:01:23 PM PDT by pattycake

Where's that surplus banked?

Martin L. Gross

There are certain unwritten rules in column writing. One is not supposed to say our distinguished politicians in both parties are, in the main, either liars or just plain ignorant.

One is not supposed to insult fellow members of the media.

One is not supposed to repeat oneself.

One, above all, is not supposed to insult the holy of media holies, the august New York Times.

Yet, you'll excused me if I break all of the above dicta in order to bring you one of the most important messages of our time.

Back before the election of 2000, I wrote in these pages, the following, in summary:

• There is no Social Security surplus by the end of each fiscal year.

• The people are overtaxed in their FICA deductions by some 25 percent.

• That extra Social Security money, some $160 billion this year, the so-called "surplus," is spent in the general fund the minute the money comes in, for everything from defense to welfare. It is actually a disguised second income tax unrelated to the aged or the disabled. It is not a "surplus" but a slush fund that enables a profligate government to spend and spend.

• There is no "lockbox" to be violated. The extra Social Security money, meant to be saved for the Boomers, is gone. There is no way for the federal government to save money. At the end of the year, it is a 0-0 sum game.

• The so-called Social Security surplus is actually a debt, a series of IOUs held by the Social Security Administration with a promise to be redeemed some day, with no idea where the real money to send out checks to the Boomers will come from. Now a debt of $1.3 trillion, it will rise to at least $4 trillion by the time the majority of boomers retire.

• To cover the lies and propaganda, the federal budget calls this enormous debt (which politicians and the media call a "surplus") as "debt securities" carried as "assets," a trick punishable by jail if it were executed by a private corporation.

If there is a true Social Security surplus, where is it banked? Perhaps at the Mellon Bank in Pittsburgh, which as an IRS contractor, recently lost 40,000 returns and massive amounts of our income taxes. No, it is not banked anywhere. It is gone.

The New York Times is a major source of this budgetary nonsense, reporting falsely on this matter on a regular basis. Over a year ago, when the surplus was supposedly $237 billion, I reported that 80 percent of that was money taken from Social Security, which the Times finally admitted. Now, with a poor economy and a $40 billion tax cut, all the so-called, non-existent surplus comes from extra Social Security taxes. Unfortunately, they are spent, but not for the aged. You cannot spend and save the same money, which makes the accounting system perpetrated by Washington a damnable lie.

Now that it is political crisis time, the media, especially the New York Times, report that the president is out to spend part of the Social Security "surplus." On a recent Sunday, George Stephanopoulis of the television talk show "This Week" continued the mantra of the major media: that since the non-Social Security surplus has disappeared, the administration is about to "dip into" the Social Security surplus fund by $9 billion.

These are both ludicrous comments considering that Washington does not just "dip into" the extra FICA taxes, but spends them all. The media gnash their teeth when the fact is that the "fund" (actually a bookkeeping item in Washington's cooked books) has always been more-than-dipped into. It never had, and does not now have, a true surplus. The extra income that comes in each year has been totally spent since 1983 when the Greenspan commission ridiculously raised the FICA taxes 25 percent for the Boomers, then learned that was no way to save the money. So it was spent and substituted by a Treasury bond, a promise to pay, or as it is known in the vernacular, an IOU -- a debt, not an asset.

It is hopeless to try to educate most of the media, but the New York Times should know better. I understand that they now have a new executive editor, Howell Raines, a man noted for his honesty and journalistic ethics. I recommend that either he speak with me, or with Sen. Ernest Hollings, South Carolina Democrat, who regularly reports on this "looting" of Social Security funds, as Mr. Hollings terms the false usage of our trust with the aged.

Perhaps the New York Times editors and writers can then start to truthfully explain the present raid on Social Security funds and thus educate the media and the politicians as that paper does so magnificently, for example, in science and the arts.

Apologists for the present chicanery say, "But for the last three years we have been using the extra Social Security money to pay off the national debt." This is another piece of propaganda. The national debt, according to the Bureau of the Public Debt (yes, there is one) was $5,526,193,000,000 in Sept. 30, 1998, at the end of the fiscal year. It increased to $5.656 trillion by Sept. 30, 1999, then up to $5.718 trillion by July 31, 2001 -- an increase of almost $200 billion in three years.

The trick behind "paying off the debt" is simple: the debt held by the "public" (read "private") parties has gone down some, but the non-marketable government (read "public" -- "we the people") debt has gone up considerably more. We borrow from one pocket and put it in another.

The truth is that the day of Social Security reckoning is beginning to arrive. Most Boomers don't know it, but legislation has already been passed and is in effect that will phase in a 67-, not 65-, year-old retirement age in a few years. Former Democratic Sens. Daniel Patrick Moynihan of New York and Robert Kerrey of Nebraska, anticipating the future, put in a bill in 1999 that would separate Social Security from the Unified Budget, and thus stop the raiding of the aged citizens money and start to truly save it.

What happened? The bill died in committee.

The way we're going, the retirement age will eventually be raised to 70. The fund might become solvent because millions who have paid in for 50 years will die before they can receive their first check.

What kind of nation so abuses its senior citizens?

The reason for all this ignorance and chicanery is obvious: Politicians in both parties need the extra Social Security tax money to feather their favorite nests and continue their immoral spending ways.

Until the day the truth comes out and the government acts to mend its injurious actions toward the aged (especially the coming aged), what is one to do?

The first thing I can suggest is:

Don't believe a word that politicians and the media say about surpluses, lockboxes or Social Security.

Educate yourself and act accordingly.

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