The Next Step in Social Security’s Ponzi Scheme

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On January 30, Rep. John Larson and 200 Democratic co-sponsors introduced the Social Security 2100 Act. Portrayed as giving retirees long-overdue benefit increases, it would actually add another step to Social Security’s long-running Ponzi scheme.

Despite Democrats’ history of rejecting that term for Social Security, it has been the biggest series of Ponzi schemes in history, redistributing tens of trillions of dollars of wealth to earlier recipients from subsequent generations.

After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first recipient, got 462 times total contributions made on her behalf). Those excess benefits inherently required that future Americans would have to pick up the tab for the difference.

Social Security has also been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid a bit more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.

Social Security benefits doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.

Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).

The Social Security 2100 Act would be the next episode. It would increase all retirees’ benefits (including current retirees who would pay nothing toward the boost) and increase the inflation (over)adjustment for benefits, picking future high-income earners’ pockets to pay for the vast majority of it, by taxing wage income beyond the $132,900 ceiling now in place (eventually to all wage income).

With the multiple Ponzi giveaways to recipients creating Social Security’s 13-digit unfunded liability and Medicare’s far larger one, how can the proposed law be rationalized? Without the benefit of being in the startup generation of earlier Ponzi expansions, the present generation is being forced to begin bearing some of the costs.

This was illustrated by an Urban Institute study of lifetime payroll taxes and benefits. Especially with recent expansions, Medicare, recipients were getting a great deal. In 2012 dollars, an average-wage-earning male would get $180,000 in benefits, $119,000 more than their contributions. A similarly situated female did even better. In sum, it yielded “excess” benefits of $105 trillion, with net benefits increasing over time.

However, for Social Security, whose major Ponzi expansions came further in the past, an average-earning male retiring in 2010 would make $300,000 in contributions, for only $277,000 in lifetime benefits. For women, with smaller average lifetime contributions and longer life expectancies, it was about a wash. And things are worsening. By 2030, that such men will be “shorted” 16 cents (10 cents for women) of every tax dollar paid.

Social Security is now a “bad deal” for current and future recipients precisely because the costs of its Ponzi structure are starting to be felt. But rather than admit that their “greatest accomplishment” relied on massive theft from future Americans, they want to restart the scheme, keeping restive seniors in their camp, by dumping even-greater burdens on future generations than they already have (hidden behind a flimsy cover story that high-income earners, actually big net losers from the system, would finally be forced to pay their “fair share”).

Democrats think they can finesse older Americans out of their votes for still more elections with Ponzi Security. But if other Americans recognized the dishonest ploy aimed at their wallets, they might end up in the electoral wilderness instead.

Gary M. Galles is a professor of economics at Pepperdine University. He is the author of The Apostle of Peace: The Radical Mind of Leonard Read.

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One thing Congress gets right: funding their own pensions

Turns out Congressmen make a lot of money…

A study found that while the average American’s net worth increased 3.7% per year between 2004-2012, members of Congress averaged 15.4% annual gains.

That high level of pay means half the members of Congress are millionaires today… and continue to collect their $174,000 annual salary.

Of course it’s you, the taxpayer, paying that cushy salary.

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But did you know the taxpayer also foots the bill for insane retirement benefits for Congress?

Each retired member can start collecting a pension at age 62 if they’ve spent just five years in Congress.

And they’ll collect 80% of their $174,000 annual salary.

That’s almost $140,000 a year, for the rest of their lives… for five years of service.

Where can I sign up?

Meanwhile, 40% of Americans can’t cover an unexpected $400 emergency expense… 57% have less than $1,000 in savings.

And a third of baby boomers—the generation currently retiring—have NOTHING put away for retirement.

While Congress’ pension is secured by your tax dollars, only 13% of regular Americans have pensions today. And even if you were promised one, collecting it is another story…

A recent Boston College report estimates 25% of private US pension funds—the pools of capital that pay out retirement benefits—will go bankrupt in the next decade. Public local, state, and federal pension funds are in even worse shape: $7 TRILLION short on what they promised to pay retired government workers.

But most Americans are relying on a different broken retirement fund… Social Security.

The Social Security Administration admits it is $50 trillion underfunded, and will run out of money by 2034.

That means cutting payouts, raising the retirement age, or both. And even that is only a short term solution…

There are, however, at least two Senators who see the injustice in all of this. They introduced legislation to eliminate pensions for members of Congress.

They say it’s not fair that while the poor get poorer, Congress gets richer.

The median American household net worth declined .94% per year from 2004 to 2012. And over the same period, 100 members of Congress watched their net worth gain 114% per year.

Members of Congress added $316.5 million to their net worth during this time period.

(But it wasn’t the Socialists in Congress who introduced the bill to address this wealth gap. They’re happy to ignore this prime example of the rich literally stealing from the poor.)

Getting rich at the taxpayers’ expense, collecting a salary 3x the median household income, and getting a six-figure lifetime pension…

That’s Congress’ reward for sinking the US government $22 trillion in debt… for creating debt bubbles in housing and student loans… for utterly failing to address a broken Social Security system… for wasting billions on things like a broken Obamacare websitedefending Congressmen from sexual assaultlawsuits… and fighting like children during a government shutdown while millions of Americans were out of work.

But whatever happens next with the economy, whatever destruction their actions cause, rest assured, they’ll take their money and run…

Just like they did in 2008 before the big financial crash. Strange how 34 different members of Congress rearranged their investment portfolios within two days of talking to top Treasury and Federal Reserve officials.

One Senator even sold up to half a million dollars’ worth of Lehman Brothers stock the day after he met with the Treasury Secretary… just months before the firm declared the largest bankruptcy in history.

These politicians suffer no consequences for the policies they force on the entire nation. On the contrary, they personally gain tremendously from the turmoil they cause.

Even if their pensions are cut — I’m not holding my breath — it is largely a symbolic move. It won’t make a dent in the dire debt and liabilities of the US government.

Unlike members of Congress, you’re on your own for retirement.

One option is, if you can’t beat them, join them. Run for Congress and watch your net worth skyrocket. Even without their golden pensions you’ll be all set for retirement.

But a more realistic (and ethical) solution is to plan your retirement assuming the government promises will not be fulfilled.

One solution is to take matters into your own hands by using self directed structures for your IRA or 401(k).

But perhaps a better solution is to become a better investor. Saving an extra couple grand a year, and putting it into the right places can make a huge difference over the course of a couple of decades.

Sovereign Man’s Chief Investment Strategist Tim Staermose was on our Podcast last week explaining two different targeted investment strategies with proven track records. You can listen here.

Worst case scenario is we are wrong—the government by some miracle saves Social Security, pays off the debt, funds its pensions, doesn’t tank the economy and avoids another recession…

And you’ll still be better off having prepared for the worst.

Pity the Nation: War Spending Is Bankrupting America

By John W. Whitehead

“Pity the nation whose people are sheep

And whose shepherds mislead them

Pity the nation whose leaders are liars

Whose sages are silenced

And whose bigots haunt the airwaves

Pity the nation that raises not its voice

Except to praise conquerors

And acclaim the bully as hero

And aims to rule the world

By force and by torture…

Pity the nation oh pity the people

who allow their rights to erode

and their freedoms to be washed away…”

—Lawrence Ferlinghetti, poet

March 13, 2019 “Information Clearing House” – War spending is bankrupting America.

Our nation is being preyed upon by a military industrial complex that is propped up by war profiteers, corrupt politicians and foreign governments.

America has so much to offer—creativity, ingenuity, vast natural resources, a rich heritage, a beautifully diverse populace, a freedom foundation unrivaled anywhere in the world, and opportunities galore—and yet our birthright is being sold out from under us so that power-hungry politicians, greedy military contractors, and bloodthirsty war hawks can make a hefty profit at our expense.

Don’t be fooled into thinking that your hard-earned tax dollars are being used for national security and urgent military needs.

It’s all a ruse.

You know what happens to tax dollars that are left over at the end of the government’s fiscal year? Government agencies—including the Department of Defense—go on a “use it or lose it” spending spree so they can justify asking for money in the next fiscal year.

We’re not talking chump change, either.

We’re talking $97 billion worth of wasteful spending.

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According to an investigative report by Open the Government, among the items purchased during the last month of the fiscal year when government agencies go all out to get rid of these “use it or lose it” funds: Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), lobster tail and crab ($4.6 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million).

So much for draining the swamp.

Anyone who suggests that the military needs more money is either criminally clueless or equally corrupt, because the military isn’t suffering from lack of funding—it’s suffering from lack of proper oversight.

Where President Trump fits into that scenario, you decide.

Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”

Rest assured, however, that if Trump gets his way—to the tune of a $4.7 trillion budget that digs the nation deeper in debt to foreign creditors, adds $750 billion for the military budget, and doubles the debt growth that Trump once promised to erase—the war profiteers (and foreign banks who “own” our debt) will be raking in a fortune while America goes belly up.

This is basic math, and the numbers just don’t add up.

As it now stands, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad.

Certainly, nothing about the way the government budgets its funds puts America’s needs first.

The nation’s educational system is pathetic (young people are learning nothing about their freedoms or their government). The infrastructure is antiquated and growing more outdated by the day. The health system is overpriced and inaccessible to those who need it most. The supposedly robust economy is belied by the daily reports of businesses shuttering storefronts and declaring bankruptcy. And our so-called representative government is a sham.

If this is a formula for making America great again, it’s not working.

The White House wants taxpayers to accept that the only way to reduce the nation’s ballooning deficit is by cutting “entitlement” programs such as Social Security and Medicare, yet the glaring economic truth is that at the end of the day, it’s the military industrial complex—and not the sick, the elderly or the poor—that is pushing America towards bankruptcy.

We have become a debtor nation, and the government is sinking us deeper into debt with every passing day that it allows the military industrial complex to call the shots.

Simply put, the government cannot afford to maintain its over-extended military empire.

Money is the new 800-pound gorilla,” remarked a senior administration official involved in Afghanistan. “It shifts the debate from ‘Is the strategy working?’ to ‘Can we afford this?’ And when you view it that way, the scope of the mission that we have now is far, far less defensible.” Or as one commentator noted, “Foreclosing the future of our country should not be confused with defending it.”

To be clear, the U.S government’s defense spending is about one thing and one thing only: establishing and maintaining a global military empire.

Although the U.S. constitutes only 5% of the world’s population, America boasts almost 50% of the world’s total military expenditure, spending more on the military than the next 19 biggest spending nations combined.

In fact, the Pentagon spends more on war than all 50 states combined spend on health, education, welfare, and safety.

The American military-industrial complex has erected an empire unsurpassed in history in its breadth and scope, one dedicated to conducting perpetual warfare throughout the earth.

Since 2001, the U.S. government has spent more than $4.7 trillion waging its endless wars.

Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $32 million per hour.

In fact, the U.S. government has spent more money every five seconds in Iraq than the average American earns in a year.

Then there’s the cost of maintaining and staffing the 1000-plus U.S. military bases spread around the world and policing the globe with 1.3 million U.S. troops stationed in 177 countries (over 70% of the countries worldwide).

Future wars and military exercises waged around the globe are expected to push the total bill upwards of $12 trillion by 2053.

The U.S. government is spending money it doesn’t have on a military empire it can’t afford.

As investigative journalist Uri Friedman puts it, for more than 15 years now, the United States has been fighting terrorism with a credit card, “essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

War is not cheap, but it becomes outrageously costly when you factor in government incompetence, fraud, and greedy contractors.

As The Nation reports:

For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year.

For example, a leading accounting firm concluded that one of the Pentagon’s largest agencies “can’t account for hundreds of millions of dollars’ worth of spending.”

Unfortunately, the outlook isn’t much better for the spending that can be tracked.

A government audit found that defense contractor Boeing has been massively overcharging taxpayers for mundane parts, resulting in tens of millions of dollars in overspending. As the report noted, the American taxpayer paid:

$71 for a metal pin that should cost just 4 cents; $644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DoD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.

That price gouging has become an accepted form of corruption within the American military empire is a sad statement on how little control “we the people” have over our runaway government.

Mind you, this isn’t just corrupt behavior. It’s deadly, downright immoral behavior.

The U.S. government is not making the world any safer. It’s making the world more dangerous. It is estimated that the U.S. military drops a bomb somewhere in the world every 12 minutes. Since 9/11, the United States government has directly contributed to the deaths of around 500,000. Every one of those deaths was paid for with taxpayer funds.

The U.S. government is not making America any safer. It’s exposing American citizens to alarming levels of blowback, a CIA term referring to the unintended consequences of the U.S. government’s international activities. Chalmers Johnson, a former CIA consultant, repeatedly warned that America’s use of its military to gain power over the global economy would result in devastating blowback.

Those who call the shots in the government—those who push the military industrial complex’s agenda—those who make a killing by embroiling the U.S. in foreign wars—have not heeded Johnson’s warning.

The U.S. government is not making American citizens any safer. The repercussions of America’s military empire have been deadly, not only for those innocent men, women and children killed by drone strikes abroad but also those here in the United States.

The 9/11 attacks were blowback. The Boston Marathon Bombing was blowback. The attempted Times Square bomber was blowback. The Fort Hood shooter, a major in the U.S. Army, was blowback.

The transformation of America into a battlefield is blowback.

All of this carnage is being carried out with the full support of the American people, or at least with the proxy that is our taxpayer dollars.

The government is destabilizing the economy, destroying the national infrastructure through neglect and a lack of resources, and turning taxpayer dollars into blood money with its endless wars, drone strikes and mounting death tolls.

As Martin Luther King Jr. recognized, under a military empire, war and its profiteering will always take precedence over the people’s basic human needs.

Similarly, President Dwight Eisenhower warned us not to let the profit-driven war machine endanger our liberties or democratic processes.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?”

We failed to heed Eisenhower’s warning.

The illicit merger of the armaments industry and the government that Eisenhower warned against has come to represent perhaps the greatest threat to the nation today.

It’s not sustainable, of course.

Eventually, inevitably, military empires fall and fail by spreading themselves too thin and spending themselves to death.

It happened in Rome. It’s happening again.

The America empire is already breaking down.

We’re already witnessing a breakdown of society on virtually every front, and the government is ready.

For years now, the government has worked with the military to prepare for widespread civil unrestbrought about by “economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

For years now, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.

We’re approaching critical mass.

As long as “we the people” continue to allow the government to wage its costly, meaningless, endless wars abroad, the American homeland will continue to suffer: our roads will crumble, our bridges will fail, our schools will fall into disrepair, our drinking water will become undrinkable, our communities will destabilize, our economy will tank, crime will rise, and our freedoms will suffer.

So who will save us?

As I make clear in my book, Battlefield America: The War on the American People, we’d better start saving ourselves: one by one, neighbor to neighbor, through grassroots endeavors, by pushing back against the police state where it most counts—in our communities first and foremost, and by holding fast to what binds us together and not allowing politics and other manufactured nonrealities to tear us apart.

Start today. Start now. Do your part.

Literally and figuratively, the buck starts and stops with “we the people.”

Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. His new book Battlefield America: The War on the American People  (SelectBooks, 2015) is available online at http://www.amazon.com. Whitehead can be contacted at johnw@rutherford.org.

Do you agree or disagree? Post your comment here

==See Also==

Here’s how much money the Defense Department wants for its trio of new space organizations

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 The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Information Clearing House.

5 Year On, Priceless Crimean Scythian Gold Still Held Hostage in The Netherlands!

Yet more proof of the wholesale fleecing of Ukr by the West, regime change is a bitch. The Ukr ppl need to oust the fake installed gov’t and join with the breakaway republics. Sweet Odessa are you listening?

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Crimean Scythian Gold

Scythian gold (Zoloto Skifov) from Crimean museums was on loan to Dutch museums when Kiev Maidan began. Instead of returning gold to the rightful owners when exhibit was over, the Netherlands has simply kept it, whisking it away to an unknown location. It has been in limbo ever since.

As Russophobia in Europe escalates AGAIN, and as US puts more and more pressure on EU, Scythian gold’s fate may soon be decided contrary to the rights and wishes of the Crimean people by the sold-out courts of the Netherlands! I spoke about it a number of times since 2014. Here’s my original 2014 video report!

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Crimea Scythian Gold/…

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