Dear Steve, the surplus was only made possible by using Enron type accounting tricks. Let me explain...
Social Security is currently collecting more money than is needed to pay benefits. These surplus revenues are spent on other government programs, and the Social Security Trust Fund is given an IOU from the Department of the Treasury. Specifically, the Trust Fund receives U.S. government bonds. These IOU's are meaningless as far as real money is concerned. Imagine if a family decided they needed to set aside money every year so their baby could attend college. But, instead of investing the money in a hard asset, the family spent the money and issued itself an IOU.
Each year the family budget would include this IOU growing because of interest. By the time the child was ready to enter college, the family would have IOU's worth many thousands of dollars (depending on what they promised the interest rate would be). That is what the government is doing today in regard to Social Security!
Another fraudulant way the government includes revenue for social security is by including payroll taxes paid by the federal government. Most federal employees are covered by Social Security. And like other workers, their employer is responsible for withholding and paying those payroll taxes. In the federal government's case, each agency of the government pretends to make a payment on behalf of its workers, and the Social Security system pretends that it has received the money.
These accounting gimmicks are how the federal government under Clinton could claim we were running a surplus. In fact, we never had a surplus if one consideres these gimmicks to be the frauds they are.
This scandal makes Enron and Global Crossing auditing techniques look like they were devised by the christmas scrooge in comparison.
We simply must shift the social security system toward the private sector, where each American has an account in their own name, with real money attached to it. Until we do, intelligent people will continue to be fooled that we have a surplus, when in reality, we owe trillions of dollars to future recipients of social security. |
