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Stocks and Mutual Funds |
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Social Insecurity
Just about everything you have been told about Social Security is an obfuscation. That is a big word for convoluted truth or lie. In a recently published obscure government document by the presidential Social Security commission there are two pages that expose the truth. Neither Democrats nor Republicans want you to read this. Shining the light of truth on the weirdness of politicians seldom makes them happy; however, you owe to yourself to know the truth. When they take out from your paycheck for FICA - that's the SS deduction - the money is sent to the Social Security Trust Fund. Your money is held in the fund for some future date when it is returned to you upon retirement. During that time it is gaining interest at about 2%. Pretty shabby, but better than nothing. This is all well and good as long as the money is really there, but it isn't. What? Now follow me with this beautiful bit of political sleight of hand. The money is invested in U.S. Treasury bills. Good, sound and safe as it gets. Right? Wait. Let's understand what has happened here. The Federal government has issued pieces of paper called Treasury bills which they have created out of thin air and replaced your real money. The Fed has borrowed your money in the "trust fund" and given you a promissory note in the form of a Treasury Bill. That money has now been transferred to the General Fund where our honest politicians spend it on whatever piece of pork they want. That does include necessities such the Army, Navy and Marines, welfare recipients and government employees like Senators and Congressmen. Let's jump ahead to your retirement date maybe 20 or 30 years from now. You and thousands like you have been putting in billions for all these years and Uncle has been printing T-Bills. Now you want your money back. Shucks, anyone knows you just cash in the T-Bills. Where does the money come from for the T-bill? From the government that created it. That means those funds must come back out of the General Fund, which is composed of taxes. But they already spent it. It's gone. Something is wrong here. The Fed took your money and put a piece of paper in its place as a promise to pay when the time came, but they did not back it up with anything except a promise to pay. All returns to SS retirees comes back out of payments by others now paying into SS. But what if there is less money being deducted for FICA at that time? It is called a shortfall. What the Fed has created is a giant Ponzie scheme where the first people who invested in it get paid, but those who came in later get less, little or maybe nothing. As long as there is a Federal surplus or a balanced budget you are OK, but when that disappears it means taxes on everyone must be raised to pay for the SS benefits. Smoke and mirrors. Politicians don't want you to be able to invest any of your own money because it means they will have less to spend and could care less what happens 10, 20 or 30 years from now as they will be long gone. That is the truth about your Social Security "Trust Fund". There isn't any and never has been. Perhaps we were asking the wrong questions this past election. Our Senators/Congressmen do not pay into Social Security, and therefore they do not collect from it. Social Security benefits were not suitable for them. They felt they should have a special plan. Many years ago they voted in their benefit plan. In more recent years, no congressperson has felt the need to change it. After all, it is a great plan. For all practical purposes, their plan works like this: When they retire, no matter how long they have been in office, they continue to draw their same pay until they die, except that it may be increased from time to time by the cost-of-living adjustments. For example, former Senator Bill Bradley (New Jersey) and his wife may be expected to draw $7,900,000 over an average life span, with Mrs. Bradley drawing $275,000.00 during the last year of her life. Their cost for this excellent plan is zero, nada, zilch.This little perk they voted in for themselves is free to them. You and I pick up the tab for this plan. Our tax dollars at work! From Social Security, which you and I pay into every payday for our own retirement, with an equal amount paid in by our employer, we can expect to receive an averageof $1,000 per month. We would have to collect our benefits for 68 years and 1month to equal the Bradley's benefits. Imagine for a moment that you could structure a retirement plan so desirable, that worked so well, that Railroad Employees, Postal Workers,and others who were not in the plan would clamor to be included. This is how good Social Security could be, if only one small change were made. That change would be to jerk the Golden Fleece Retirement Plan out from under the Congressmen & Senators. Put them into the Social Security plan with the rest of us. Watch how fast they fix it! If enough people receive this message, maybe a seed will be planted and maybe good changes will evolve. Our girl Hillary Rodham Clinton now comes under this Congressional Retirement Plan. Sspeaking of the Clinton's, it's common knowledge that in order for her to establish NY State residency, they purchased a $million-plus house in upscale Chappaqua, NY. Makes sense. Now, they are entitled to Secret Service protection for life. Still makes sense. Here is where it becomes interesting. A residence had to be built in order to house the Secret Service agents. The Clintons now charge the Secret Service rent for the use of said residence and that rent is just about equal to their mortgage payment, meaning that we, the tax payers, are paying the Clinton's mortgage. And it's all perfectly legal. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2005
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