Exhibit A pointed out that Social Security is a Ponzi scheme of Brodignagian proportions because its underlying “trust fund’ is not a tangible corpus of funds, only future IOU claims on higher taxation of future worker’s (i.e. your kids’) earnings. (See “SS Is A Ponzi Scheme”)
Exhibit B is the real nail in the coffin, however: ‘Imputed interest’ on the underlying fictional Social Security trust funds.
Each year, CBO and other budget authorities in Washington add a number to the ‘trust fund’ account balance of Social Security that ‘approximates’ what the imputed interest payment to Social Security would have been…assuming, of course, that there actually was a ‘true’ Social Security Trust Fund in existence in the first place replete with bonds, money and investment…that sort of thing.
They pick a number out of thin air and call it the ‘right’ interest rate figure. Then they ‘guesstimate’ what the underlying corpus of funds would have been in the Social Security ‘Trust Fund’ had the so-called ‘surplus’ not been spent completely on other programs the moment payroll taxes came in the IRS door. They then calculate the ‘imputed’ or assumed amount of interest in round dollar amounts. Finally, they add that humongous amount of vaporous interest ‘payments’ to the underlying fictional trust fund amount.
This year, the interest rate was 5% and ‘yielded’ over $128 BILLION in assumed interest payments to the Social Security ‘Trust Fund’. $128 billion….in fictional, non-cash accrual credit entries on a computer program somewhere in Washington.
So there you have it: Your American government is calculating higher-than-market rates of interest and crediting fictional amounts of interest payments to a trust fund that doesn’t exist and telling everyone: “Don’t worry about it! All is well!”
Good Lord! Where is the SEC when you really need a watchdog? Or the FBI…talk about white collar crimes! Is there any more of an underhanded accounting of finances anywhere in this country of ours?
$2.3 trillion of falsehoods. Can Sarbanes-Oxley be applied to the accounting methods of the Social Security Administration, the White House and the U.S. Congress?
So Exhibit B should be enough proof to convince you that the Social Security ‘Trust Fund’ is a fraud and a hoax on the scale like we have never ever seen before, correct? We have one more installment to blow your mind but this one actually is positive and will lead to more economic prosperity so stay tuned.
(for those of you who really secretly love this sort of stuff and want to be a ‘closet’ budget wonk nebbish so you can mystify and amaze your friends and co-workers, here are two blogsites that go beyond the pale and get into the weeds deeper than ticks if you want to learn more…. see Andrew Biggs and Angry Bear )