On Sunday, February 27, 2005 , the Washington Post published an article titled “Partisan Social Security Claims Questioned” that is well worth a read because it illustrates how the federal government’s scam is coming unraveled.

In this article, and under the subhead “Trust Fund Disputed,” the Post said: “There is, in fact, a trust fund, but its significance is subject to debate. This year alone, the government will take in nearly $173 billion in payroll taxes that it will spend on programs other than Social Security. For those dollars borrowed from Social Security taxes, the Social Security Administration receives Treasury bonds equal in value plus interest. When Social Security benefits surpass Social Security taxes, between 2018 and 2020, the Social Security Administration will begin redeeming those trust fund assets, which will peak at nearly $6.6 trillion.

Once redemption begins, future administrations will have to make good on their IOUs, or risk a potentially destabilizing default on U.S. sovereign debt.

To redeem those bonds, the government will have three choices: raise taxes, cut spending or borrow more money. Those are the same choices the government would face even if there were no trust fund.”

In other words, the trust fund is absolutely useless to you and me but not to the government that can use it, much like going to the strongbox in the basement of some bank, to double tax us plus interest and do so without legislation.

They simply go the so-called valult, pull out some of their permission slips, and execute any one of their three options to "raise taxes, cut spending or borrow." Currently the choice is to borrow. Why do you think the national debt is skyrocketing?

They are doing it right now with many of the entitlement trust funds that are already being drawn down. The Unemployment trust is one example. It has gone from holding $91 billion UOUs in June of 2001 to $41 billion today.

Anyone who has read a few of my articles over the last decade knows that this trust fund scam is a subject I’ve been harping on since I first began questioning the national debt where the Social Security trust funds are 22.3 percent of today’s total debt and 53 percent of the deceptively labeled “Intragovernmental Holdings” portion of that debt, a portion that’s made up entirely of more than one hundred forty trust funds, all part of the scam. The money's been spent. The so-called trusts are just a way to tax or double tax you.

Naturally, I’m overjoyed to see the Washington Post weighing in on Social Security’s real problem even if they do get some of the numbers wrong.

The “$173 billion in payroll taxes” referred to may be how much the trust fund will increase this year but not all of that is from surplus taxes. A good chunk of it will be interest that’s added simply by handing the trust more bonds, no money involved. Last year this free interest amounted to more than $80 billion and the surplus was $71.1 billion for a trust fund increase of $151 billion. (See charts)

This current article follows one written by Charles Kurthammer last week in which the noted syndicated columnist said “2042 is a fictional date for the fictional bankruptcy of a fictional trust fund.”  I linked his article in one of my own called “Don’t Give Up, help is coming.” Thank God, it seems to be actually happening.

As an aside, back in the sixties when I was a bachelor father living in Chicago, my son Chris who lived with me during his “in-between years” got a kick out of opening the doors to those Schlitz-on-Tap shot-and-a-beer bars and yelling “don’t give up, help is coming” and then running away. Evidently, there were politicians or journalists in some of those bars. They adopted and changed Chris’ succinct slogan to “help is on the way” so as to not offend the sexually perverted sensibilities of anyone who might think that “help” was having an orgasm.

Back to the subject at hand

Except for their own Thrift Savings Plan, confiscated drug money, and a few other trusts like some Indian accounts, what the federal government calls a “trust fund” is one of the world’s greatest misnomers – a deliberate misuse of the English language. And the problem is much greater than semantics or crazy grammar.

The entire “Intragovernmental Holdings” (isn’t that a mouthful) portion of the national debt, currently standing at $3.2 trillion, is made up of accounts that have nothing whatsoever to do with real trust funds; i.e., the fiduciary activity of stewarding property.

Instead, these accounts hold nothing but markers that are absolutely useless to you and me, but serve to let the government double tax us (plus interest that is paid by simply handing the trust more markers annually) under what I call the “Pay-It-Again Sam” scam.

Yet, it’s these same markers held by fictitious “trust funds” that the Beltway Bandits insist will sustain Social Security until at least 2042 or 2052, depending on whose projections you believe.

The reality is exactly what the Washington Post points out. Once Social Security turns to these phony trusts for operating cash, to pay benefits, in the year 2011 or whatever when the 7.6 million baby boomers start to retire, the government will have to “raise taxes, cut spending or borrow more money.”

These are the same three basic choices of fund raising and robbing Peter to pay Paul manipulation that are the only means our not-for-profit pay-as-you-go representative federal government has at any time and whether there is a trust fund or not. The government has no other way to raise revenue.

We got that far during the summer of 2001 and before 9/11 completely buried the subject so dangerous to the Beltway Bandits, the subject that makes Social Security the “third rail” of politics.

Apparently, the other newspapers, watchdogs, and media people have short term memories or are too lazy to go to their own archives to look up what happened the last time Social Security was on the front burner. A time when we had one authority or economist after another telling us that if Social Security must ever turn to its “trust fund” for money the poor dears in Washington would be faced with the tough decision of either (1) raising taxes (2) borrowing more money (3) cutting programs (including benefits) or any combination thereof.

There was also a brief moment about a year later when Enron, Tyco, WorldCom and other private sector crooks were the news and some columnists began to compare their crimes with what the government does hiding debt in trust funds. But this was buried by the “Attack Iraq ” campaign.

Now we have Social Security back on the front burner again and beginning to unravel what is just the tip of the iceberg in a multi-trillion dollar scam that the Beltway Bandits will fight tooth and nail before admitting or giving up. And one of the ways they will fight it is with “weapons of mass distraction.” We are already beginning to hear rumors about the evils of Iran , the same nation that accused us of sheltering the Shah who they said ran off with their treasury back in the Carter era.

However, this time the subject is liable to be buried by a much more apocalyptic event. On February 22nd, Counterpunch published an article by Kirkpatrick Sale titled “Collapse of the American Empire” which outlined four major conditions that historically cause such disasters when the leaders and inhabitants of various empires didn’t see it coming or thought it was impossible. It sums up what several others are writing about. Read it and ask yourself if those conditions already apply to us.

We already have a dollar falling in value worldwide, a completely out of hand balance of trade, and a skyrocketing national debt caused or accompanied by huge deficits – three factors that many describe as the “perfect storm” of economic conditions that have never before taken place all at the same time and which may not be manageable.

We also have the central banks of several nations warning us that we better get our financial house in order. Many of these foreign nations hold a heavy cache of honestly contracted Treasury securities that can be cashed-in at any time, a situation that could bankrupt us.

On top of that, we are outsourcing jobs, losing a manufacturing base that built much of this country, have borders open to illegal immigration, medical costs that many cannot afford along with a prescription drug fiasco caused by the government’s inability to regulate the pharmaceutical industry. An industry that employs lobbyists outnumbering the members of Congress. We also have a public that’s carrying more than an average $12,000 per household credit card debt plus increasing mortgage obligations that came with cheap interest rates. And there’s a huge segment of the population that lives from one paycheck to another, some depending on Social Security alone, much like the “pay-as-you-go” government lives from one fiscal year to another and also has habitually depended on Social Security’s surplus overcharges.

In other words, the very people fully responsible for paying-off all parts of the national debt, the taxpaying public, and particularly the contracted foreign debt held in legitimate treasuries may not be able to come up with the necessary cash if immediately forced to do so. In many ways, we are at the mercy of our former enemies and newer competitors. Even Osama bin Laden claims to be out to bankrupt us.

I do not relish being the bearer of bad news, especially since I once specialized in the very positive and upbeat world of new product innovation and development, but part of my research job has always been to tell people the truth – whether they want to hear it or not.

Personal accounts are a wonderful thing, but not the way Bush seems to be presenting the idea. There is more reason to suspect and be wary of his ideas and accusations than there is to accept them. What other organization would plan a $2.57 trillion budget when last year’s revenue was $1.86 trillion? And who needs more money the most? Especially, with sources of borrowing drying up and turning to the Euro for a better return.

People were always supposed to save something to invest and Social Security was never meant to be anything more than “supplemental” insurance to make certain anyone who worked in this country wouldn’t be destitute in their golden years or end up in the very real “poor houses” of the thirties.

If anything, Bush’s plans for personal accounts are very likely to be nothing more than a devious method of raising more loot for government coffers. Booty that goes to a system of spending that desperately needs additional cash to support the oligarchy and its New World Order plans in order to continue extending the military/corporate empire. An empire that has been selling “protection” to other nations and protecting our “national interests” in much the same way the Mafia sold “insurance” to retailers and protected its territory in New York during its beginnings in this country.

The third rail is definitely the catapult to unraveling the scam that both republicans and democrats have been pulling for ages and particularly since 1983. Watch out for an extreme diversion and an opportunity to weasel out of the confrontation once again. In many ways, it’s almost a race to the truth before the collapse or before we lose the option of choice.

Don't let the crooks off the hook.