"Checkmate" In The Social Security Debate?!?

Carl cwsiv_2nd at HOTPOP.COM
Thu May 26 11:20:14 MDT 2005


Social Security rulings are informative
by John A. Quayle

I am shocked and appalled at the vitriol shown by readers of this
newspaper with regard to privatizing Social Security. First and
foremost, it would seem that the defenders of the current system have
disregarded several key elements in this debate.

The plan being pitched from the White House is voluntary. Unlike our
present system (which is forced compliance), the new plan would be left
to individuals to decide what would be best for them to do with their
retirement funds. After all, shouldn't those who've earned the money be
permitted to have a say in where and when it is invested? Seems fair to
me, since we Americans all have had the right of self-determination
under the Constitution. I'm sure there are those reading this paper who
simply bristle at the notion of each citizen having so much autonomy and
that's a real pity.

The privatization plan involves a mere 6 percent of an individual's
accrued retirement funds. Since only those within certain age perimeters
will be able to invest a small slice of their Social Security funds into
private accounts and acknowledging that not everyone who is eligible
will choose this option, this means that slightly more than 94 percent
of the total money collected will still be available to the existing
system. Does this sound ruinous to you?

Let's take a peek at a few of the rulings on this subject by the U.S.
Supreme Court. It will come as a shock to most readers that the Supreme
Court ruled twice that we Americans have no legal right to Social
Security payments. First, let's establish a few legal definitions.

In Helvering vs. Davis (1937), the court said, "it lays a special income
tax upon employees to be deducted from their wages and paid by the
employers." (referring to Title IX of the Social Security Act of 1935.)

The validity of this tax was argued in Charles C. Stewart Machine
Company vs. Davis (1937.) The court said, "The tax begins with the year
1936, and is payable for the first time on January 31, 1937. During the
calendar year 1936 the rate is to be 1 per cent, during 1937 2 per cent,
and 3 per cent thereafter. The proceeds, when collected, go into the
Treasury of the United States like Internal Revenue collections
generally. ... They are not earmarked in any way."

The high court's opinion in this case validated the tax imposed by the
Social Security Act by reasoning that "employment is a business
relation, if not itself a business."

In Flemming vs. Nestor (1960), the court said, "To engraft upon the
Social Security system a concept of 'accrued property rights' would
deprive it of the flexibility and boldness in adjustment to
ever-changing conditions which it demands."

None of these opinions from the Supreme Court sounds at all like it is
talking about an insurance plan. Rather, it sounds as if it is
justifying taking our money and defying any one of us to do something
about it. Theft is theft.

Here's proof that Social Security money is not sitting in an individual
account in Washington, D.C., awaiting any of us to retire. The Office of
Management and Budget in its "Budget of United States, Fiscal Year
2000," says:

"These (trust Fund) balances are available to finance future benefit
payments... but only in a bookkeeping sense.... They do not consist of
real economic assets that can be drawn down in the future to fund
benefits. Instead, they are claims on the Treasury that, when redeemed,
will have to be financed by raising taxes, borrowing from the public, or
reducing benefits or other expenditures."

This unmistakably smacks of a Ponzi scheme, which pays off old
"investors" with money coming in from new "investors." A major factor in
the eventual collapse of a Ponzi scheme is that there is no significant
source of income other than new investors. Worse, there's nothing that
you can do to bring a little justice into a minefield of deception. This
is illustrative of the prime reason that nobody should ever willingly
turn over any personal responsibility to the federal government – no
matter who may be in charge.

by John A. Quayle

North Franklin Township

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