.png)
Government Misuse of Social Security
The U.S. government has been borrowing in the trillions from Social Security funds for years as the American public paid more into the Social Security fund than they collected.
“The government is expected to borrow over $2 trillion from these Social Security trust funds to pay for government spending over the next ten years,” according to a report from the House Oversight Committee.
The Oversight Committee says that the U.S. government has no intention of repaying the borrowed money from the Social Security fund. “Administration officials and Republican congressional leaders have called the trust funds ‘a mere accounting device’ from which employees will get ‘nothing in return.’”
Research by the oversight group found that between 2000 and 2005, when President Bush was in office, the federal government borrowed $500 billion from the Social Security system. Should the government keep borrowing at that rate, it will have borrowed $2.5 billion by 2015.
Government Cash Cow
U.S. officials are using Social Security as a cash cow to pay bills without reimbursing the fund, claim retirement system experts.
Part of the cash U.S. workers pay monthly into Social Security is used to pay monthly retirement checks, while the remainder is placed into the Social Security Trust Fund.
The minute there is some real money in that fund, federal government officials withdraw it and replace it with an “IOU,” represented by a government bond on paper.
The Treasury pays monthly interest, which is immediately withdrawn by officials and replaced with another IOU, perpetuating another cycle of creating a government bond, representing another IOU. Officials claim that the government is rescuing those funds from being invested in private sector securities, keeping the Social Security System alive.
The American Thinker website defines Social Security as a Ponzi scheme because people who pay into the system for the right to receive a retirement income at a later day are paying for those receiving funds now.
Thomas Sowell, an economist and senior fellow at the Hoover Institute at Stanford University, wrote in an article published on a number of websites that the Social Security system is no more than creative accounting or accounting trickery, as funds are lent from one government agency to another. Such funds are not counted as official government debt.
He compares Social Security to what occurred at Enron Corp., with one huge difference.
“Social Security is a much bigger operation than Enron and even more people are depending on it for their retirement money. How much they will be cheated out of depends on how artfully future politicians can manage it.”
