The United States is close to broke, but that’s not the worst of it. Beltway politicians are doing squat to pull us from the abyss.
Part of the reason for our financial decline falls on the shoulders of a generation of liberal politicians who have ransacked every nook and cranny bank account in federal government to scrounge money for their nanny-state dreams.
Their marauding hit the jackpot when they stole all the money from the Social Security Trust Fund. Now, there is no money left in our Social Security fund. Zip. Nada. Subsequent liberals rejected a 1935 pension plan promise by Franklin Delano Roosevelt, turning it into a program that stole workers’ money for 75 years, to pay the government’s bills.
Promoting the Ponzi trap, the liberals routinely represented Social Security as a savings program. Workers paid money into the program and were told fraudulently that the money would be “set aside for them to provide themselves retirement income and disability insurance,” Barron’s reported.
Not only is there no money in the bank and no interest being earned, there’s no serious plan to deposit any. The Social Security lockbox, which is physically located in the small town of Parkersburg, W. Va., has no money it. The lockbox contains a three-ring binder with a stack of IOUs from the Treasury Department. Pieces of paper.
You see, the Social Security program is the granddaddy of Ponzi schemes. It pays money and benefits to older retirees and workers that come from money paid by later participants. Ponzi schemes are illegal because they always collapse. But the Social Security scheme is mandatory, assuring an endless line of new participant workers. The fly in the government’s ointment is that not enough young workers exist to support the scheme. The system is on a course to collapse, because current estimates of future unfunded liabilities of Social Security are $18 trillion.
An unfunded liability is the amount promised in benefits, looking into the future, less the payroll taxes and premiums expected to be collected.
Here’s another time bomb: In 1965, Lyndon Johnson signed into law an amendment to Social Security that created the “social insurance program” of Medicare. The last I looked, the unfunded liability of Medicare, at its current benefit level, is $86 trillion if a 75-year time horizon is taken.
But we’re not through yet. The third scary question mark is Medicaid. This is a joint program of the feds and each individual state, designed for low-income individuals and families. The unfunded obligations of Medicaid are trickier to estimate than Social Security and Medicare. That is because Medicaid funding comes from general tax revenue funds and fluctuates year to year. But let me assure you, it’s a very large number. Unfunded obligations for Medicaid were estimated at over $20 trillion prior to Obamacare being passed. According to the Senate Budget Committee, this new “health care law adds $17 trillion in new unfunded liabilities… by massively expanding the Medicaid program and creating new Exchange subsidies.”
So we’re looking at future unfunded obligations for Social Security and Medicare at over $104 trillion, with Medicaid adding a scary unknown amount. However–prepare yourself– the Federal Reserve says the total private net worth of our country is only $51 trillion!
How will Social Security be fixed? Where will this money come from since our younger workers, no longer plentiful in comparison, cannot possibly fund such future obligations? The retirement age will no doubt need to be raised. Cost-of-living increases must be changed. Either standard benefits must be cut back — political suicide for any politician — or taxes must be raised. A 2009 Forbes article says that “federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.”
If you don’t understand that we are headed for massive tax increases at some point in the not-very-distant future, the inescapable conclusion is that you are a liberal in denial or living in fantasy.
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