Wednesday, July 11, 2012

Social Security Trust Fund?!?!?

Chicago AM Tuesday 24 April 2012 351 words

Editors, the Wall Street Journal


The Wall Street Journal article “Outlook for Social Security, Medicare Continues to Deteriorate” by Mathew Crittendon and Eric Morath of Monday 23 April uses the term 'trust fund' five times, referring to money the federal government uses to fund the 'safety net,' a term found in neither the 8 thousand word Constitution, nor its supporting 192 thousand word Federalist Papers.

It seems strange that a newspaper of the size and reputation of The Wall Street Journal would use that term even once, since the only fund the federal government has is the general fund.

The general fund has two functions: As a receptacle for all the money the federal government takes in, and the single source of all the money it spends. The going-in money is tainted from the start: it is alleged to come from wage earners' income tax and 'safety net' contributions (social security and medicare,) but actually comes from employers bank accounts. The only link to wage earners is paystubs saying “We are required to send in large amounts of money to the federal government, but rest assured if we weren't threatened with jail we would have given the money to you. (The 2012 Statistical Abstract of the United states shows 73% of all federal taxes received in 2010 came from employers' bank accounts, not Wage earners'.)

The outgo from the general fund has no relation at all to the income: Its amount is limited to the minimum needed to keep voters believing they are getting something for nothing. But even this carefully limited amount is more than the general fund income, so the federal government is forced to borrow money to make the system work. During the first six years of the George W Bush administration that borrowing amounted to an unprecedented at the time monthly shortfall of $20 billion. In the last 2 years, with the able assistance of a Democrat House of Reps, who know a thing or two about deficits, it was increased to $35 billion a month. This process has become so knee-jerk that the current President has increased it to $120 billion a month.

Arnold H Nelson

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