Apart! And reveals it to be
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| FIGURE 46
TITLE H—FEDERAL OLD-AGE BENEFITS OLD-AGE EESEEYE ACCOUNT section 201. (a) There is hereby created an account in the Treasury of the United States to be known as the "Old-Age Reserve Account" hereinafter in this title called the "Account". There is hereby authorized to be appropriated to the Account for each fiscal year, beginning with the nscal year ending June 30,1937, an amount Sufficient as an annual premium to provide for the payments require^ under this title, such amount to be determi ted on a reserve ba'sis iii accordance wit i accepted actuarial principles, and based upon such tables of mortality as the Secretary of the Treasury shall from time to time adopt, and upon an interest rate of 3 per centum per annum compounded annually. The Secretary of the Treasury shall submit annually to the Bureau of the Budget an estimate of the appropriations to be made to the Account. (b) It shall be the duty of the Secretary of the Treasury to fevest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or inobligatipns guaranteed as to both principal anft interest by the JJniteci States. For such purpose such obligations may be acquired (1) on original issue at par, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at .par of special obligations exclusively to the Account, Such special obligations shall bear interest at the rate of 3 per centum per annum. Obligations other than such special obligations may be acquired for the Account only on such terms as to provide an investment yield of not less than 3 per centum per annum. (c) Any obligations acquired by the Account (except special obligations issued exclusively to the Account) may be sold at the Sar&et price, and such special obligations may be redeemed at par „ us accrued interest. (d) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Account shall be credited to and form a part of the Account. (e) All amounts credited to the Account shall be available for making; payments required under this title. (f) The Secretary of the Treasury shall include in his annual report the actuarial status of the Account. in its ignorance, believed and relied on the illusion created by the law. In any case, the Supreme Court obviously believed that the government's ability to "save men and women from the rigors of the poor house" rested on the creation of a legitimate financial reserve similar to those maintained by insurance companies. Would the court have believed that individuals could be "saved" purely on the basis of a pay-as-you-go chain letter? This point is a key element in the Supreme Court's holding that Social Security was constitutional. It was the Court's belief (misguided though it was) that the payment of old-age benefits was to be tied into the creation of a sound actuarial reserve. The government now openly admits that such a "reserve" doesn't exist and that Social Security is based solely on a pay-as-you-go basis. In addition, a government-appointed Finance Committee further admits that even if a "reserve" did exist, it would be of no benefit (see page 143)! The government admits, therefore, that the constitutionality of the current, pay-as-you-go Social Security system has never been established by any court, nor could it be! Other Court Misconceptions In 1938 the Court also believed that the Federal government was in a strong financial position to take on these commitments1: "State and local governments," 1 The government was financially strong in 1935 but that certainly is not the case today. In 1935 the Federal government's total funded and unfunded liabilities amounted to approximately $20 billion. Today those liabilities are over $10 trillion, or 500 times greater! This is only part of the price that the American public must now pay for its collective folly in repeatedly sending drunken sailors to the U.S. Congress. Cordoza pointed out, "are often lacking in the resources that are necessary to finance an adequate program of security for the aged", (emphasis added) Apart from deciding how much is "adequate", it is obvious that the Court (in holding Social Security constitutional) again indicated its belief that old age benefits would be financed and paid for out of legitimate "resources" presumably acquired, invested, and maintained by the Federal government. Printing Press Money Is Not A "Resource" Again, referring back to the hearing that took place on May 27, 1976 (before the Joint Economics Committee), W. Allen Wallis, Chairman of the Advisory Council on Social Security, explained the public's misconception of Social Security when he stated: "When you pay Social Security taxes you are in no way making provisions for your retirement. You are paying the pensions of those who already are retired. Once you understand this, you see whether you will get the benefits you are counting on when you retire depends on whether the Congress will levy enough taxes, borrow enough, or print enough money, and whether it will authorize the level of beneifits you are counting on." (emphasis added) Wallis' reference to the government's (illegal) ability to "print enough money" was again reiterated by Senator Proxmire who noted that the government has "the power" (but obviously not the right) to deliver money that "may not be worth anything when the recipient gets it." (For the full quote, see page 154.) It must be obvious that printing press money was not exactly the type of "resources" the Supreme Court had in mind. Such "resources" were not even available to the Federal government when the Supreme Court rendered its decision. At that time Federal Reserve and U.S. Notes were domestically convertible into silver, while, internationally, the U.S. was on a gold exchange standard. If private citizens couldn't exchange their currency for gold, foreign central banks could (which to some degree helped to keep the Federal government honest). Now all U.S. currency is counterfeited (made to resemble coined money and redeemable notes).2 These worthless paper "dollars" and "slugs" are not authorized to circulate as money by the U.S. Constitution. In fact, the writers of the Constitution included specific provisions to bar such criminal practices by both Federal and state governments. If city and state governments could have printed their own "money" back in 1935 with the same impunity that the Federal government does today, then they, too, would not have lacked the "resources.. .necessary to finance (their own) adequate program of security for the aged". Once again we see that the Supreme Court's 1935 decision was based on assumptions that absolutely do not apply to Social Security as it operates today.3 1 See Chapter 1, The Biggest Con — "The U.S. Money Swindle". 8 So, not only does the Federal government operate the world's largest Ponzi scheme, it is also the world's biggest counterfeiter and, of course, collects U.S. income taxes through out-right extortion. In essence, the Federal government consists of a collection of embezzlers, counterfeiters and extortionists! And, what is even more ludicrous is that these are the same clowns who want us to give them $250 billion a year so that they can "protect" us from the Russians! Fundamental Illegality of Social Security Now Openly Admitted As explained on page 94, the Supreme Court held Social Security constitutional because it refused to face the following issue: Were Social Security taxes earmarked for Social Security benefits (as argued by Davis), or were they general receipts designed to provide the government with ordinary revenues (as claimed by the government)? Now, some 47 years later, the Federal government itself has openly admitted and emphatically answered this question—Social Security taxes (regardless of how the "law" is worded) go to pay Social Security benefits — period! Chapter 7 contains reference after reference wherein one government committee after another openly admits that Social Security taxes are used to pay for Social Security benefits. Even the captions that have now been inserted into the law itself proclaim that Social Security taxes go to pay for Social Security benefits! Let me quote again from Wallis' statement to the Joint Economics Committee: "Many people think that the Social Security taxes taken out of their wages and sent to Washington each month provide for their old age pensions and other social security benefits. This simply is not the case. Those taxes are levied on workers in order to pay benefits to people who already have retired and are drawing their Social Security pensions or to pay other Social Security benefits to those who already are drawing them." (emphasis added) In the face of such testimony (and in the face of a mountain of evidence now available that was not avail- able in 1937), can the Federal government now claim that Social Security taxes are not levied for the purpose of paying Social Security benefits; but, rather, are needed to pay the ordinary expenses of government? Social Security Taxes Admittedly Levied To Pay Social Security Benefits Social Security taxes are routinely increased (even while regular taxes are presumably cut) based solely on the government's contention that increased Social Security taxes are needed to pay increasing Social Security costs. In the face of this, will the government dare contend (as it did in 1938) that Social Security taxes are not "earmarked" for Social Security purposes but, instead, are increased solely to meet the general expenses of the Federal government? Isn't it obvious (based on the [false] representation made by the government in the 1938 Helvering case) that the position then taken by the Court and the government's current admissions render Social Security openly unconstitutional? Can any objective, responsible and intelligent person claim otherwise? The unconstitutionality of Social Security on this one issue is an "open-and-shut" case. And, of course, the Act is blatantly unconstitutional on a variety of other grounds previously examined. 60% Of All Federal Expenditures Obviously Illegal By allowing the Federal government to levy a "Social Security" tax for an obviously illegal purpose, the Supreme Court gave the government the green light to raise taxes for a variety of other (equally illegal) pur- poses. The very existence of Social Security served to confuse the American public as to whether or not the government could legally levy taxes to pay for anything it wanted. American citizens are now compelled to work in order to pay taxes to bail out Mexican and Brazilian banks; to pay the interest on Polish bonds; to subsidize wheat for the Russian economy; to pay farmers not to grow food; to pay for college tuitions; to pay the rent of private citizens; to make loans to private businesses; and to bail out foreign economies — all of which are illegal. The Constitution, remember, only allows the Federal government to tax the American public for the following purposes: 1. To pay the debts of the United States—not to pay the debts of individuals, corporations or foreign countries. 2. To provide for the national defense — which means to provide for our own military forces and perhaps to help supply and equip military forces of a friendly power. This cannot, however, include economic aid. If this provision is stretched to include economic aid then the U.S. Constitution imposes no limitations on the governments capacity to spend money. 3. To provide for the general welfare of the United States. This does not mean to provide for the welfare of specific individuals or groups of individuals, corporations or foreign countries. All of these expenditures are, of course, illegal; but what can the American public expect? It is obvious that Social Security is unconstitutional. What is not obvious is the number of other programs which are equally unconstitutional. A Supreme Court that would allow the Federal government to get away with Social Security will allow the Federal government to get away with anything! SUMMARIZING THE POINTS COVERED IN CHAPTER 8 1. The Social Security Act provided for a Social Security "reserve" to be maintained on the basis of "accepted actuarial principles". 2. In holding Social Security constitutional, the Supreme Court relied on the creation of such a "reserve" fund. 3. The government now admits that the fund (relied upon by the Supreme Court) does not exist, thus rendering the Helvering decision (predicated on such a "reserve") null and void. 4. The government's admitted willingness to pay Social Security benefits with (increasingly) worthless "paper money" was obviously not the type of financial "reserve" contemplated by the Court when it reviewed the Federal government's financial strength against that of local governments. 5. The open admission by the Federal government that Social Security taxes are used specifically to pay for Social Security benefits (exactly contrary to its claim before the Supreme Court in the Helvering case) establishes, without question, the unconstitutionally of Social Security. 9 The System Encourages Rampant Abuse In this treatise no attempt has been made to analyze the alleged benefits of Social Security or to attempt to show how similar benefits might be purchased cheaper through private insurance carriers since such considerations are, in my view, immaterial. If the Act is illegal (which it is), no other consideration is important. This book was designed to help people get out of the program and to provide them with the legal, moral and economic means to do so. I could not, however, leave the subject of Social Security without exploring one other aspect of the program — its basic immorality. I believe that this area should be examined because advocates of Social Security always like to assume a superior moral attitude (as if those of us who oppose this swindle have no compassion for the elderly, the dependent or the disabled). These few examples taken from my own personal experience should illustrate that advocates of Social Security not only have no legal or economic basis for their beliefs, but they have no moral basis as well. Should Individuals Who Do Not Need or Want Social Security "Benefits" Be Compelled To Purchase Them? In 1978 (while conducting a seminar in Los Angeles) a young lady stopped at the lectern and asked if I was going to explain "how to get out of Social Security". I told her that would depend on whether she was self-employed. If she were, I could help her get out of Social Security (as well as regular income taxes); but if she was working for someone else I probably could not. She said that she was self-employed and was, therefore, overjoyed at the prospect of being able to get out of Social Security. The woman seemed to be in her early thirties and explained that she had an incurable illness (the name of which I did not recognize then, nor can remember now). While I outwardly showed no emotion, I was actually extremely moved by her "matter of fact" disclosure that "I only have, at most, six more years to live". She apparently was unmarried and had no dependents and obviously had no expectation of living to retirement age. There would be, therefore, no benefit to anybody for the substantial Social Security taxes she was paying (forgetting the one-shot, lump sum death benefit of $255.00). She said she felt her Social Security taxes were a total waste of money since she didn't need to put aside money for her "retirement years" that she knew would never come. She wanted to be able to spend whatever money she earned to enjoy what time she had left. For some reason she felt she had no need of any of the medical and/or disability benefits that Social Security also provided, but I didn't want to pry and, therefore, never found out why. The point is, that those do-good social planners who think they know how to organize everybody's lives forget about people with shortened life expectancies who are not at all concerned with "retirement". Should these people be compelled to participate in a retirement program that they have no need for and, in so doing, deny themselves things that they could otherwise enjoy? Why shouldn't people be free to spend their own money on the things they want? Is it because these liberal do-gooders believe that they know what's best for us, even if we don't? People Won't Save, So The Government Has To "Force" Them To Save Over the many years that I have been arguing against Social Security, its advocates always argued that the reason we need Social Security is that "people just won't save for their old age and, therefore, the government has to force them to save". The implication of these arguments was always that Social Security forced people "to save". Such advocates argued that the government was taking Social Security taxes and putting them into a form of "savings plan" for such taxpayers. If this were really the case, Social Security might not have been such a bad idea. But the truth of the matter is that the government never "saved" one dime of what it took from the public in the form of Social Security taxes. The government simply took these taxes and spent them on a variety of government projects — many of which are totally insane (like paying farmers not to produce). In essence, Social Security actually prevented the public from saving! True, not all the money paid into Social Security might have been saved, but if even a small portion of it had been, the capital wealth of this nation would be billions of dollars higher than it is today. In reality, not one penny of Social Security taxes was ever saved for anybody as the bleeding-heart advocates of it continually claimed. Social Security Disability Payments Breed Dependency A friend of mine was a successful salesman in a specialized field but I never knew he only had one kidney until he had to have it removed. Shortly thereafter Steve spent a lot of time in the hospital attached to a dialysis machine. Eventually he was able to treat himself and he showed me the implants on his wrists which had to be attached to tubes on his home machine. Steve said that home dialysis wasn't really that bad—in fact, he could even have his treatments while watching television. In any case, he was surprisingly cheerful about the whole thing and optimistically looked forward to the day when he would again be able to earn the kind of money he had been used to. He was then, as I recall, receiving about $600-700.00 per month in Social Security disability payments; but that was what was causing his dilemma. It seems that if he earned any money at all on his own he would lose his entire disability check. Government disability payments have to be issued strictly according to the law which apparently means either you are disabled or you are not — there is no provision in the law for subjective decision making.1 A recent news article (see Figure 47) dramatically reveals 1 This is probably as it should be, otherwise the law would not be administered uniformly and would, therefore, be subject to the whims and interpretations of bureaucrats. This is also precisely why the government shouldn't be in the disability business in the first place. |