Brenda Braxton

Whatsisname

Tuesday, September 28, 2004 – The award winning KGW (Portland NBC affiliate) team of Braxton and Whatsisname best exemplified Oregon broadcast journalism at six this morning by presenting Robert Eisenger of Lewis and Clark (a college with pretensions of greater things through poorer analysis) as their frontline defense of socialist government.

The subject was Social Security.  President George W. Bush wants to introduce privatization options.  Democrats and some Oregon Republicans (Democrats who wear a tie), oppose the idea, so your heroic maternal liberal media constantly gives college professors, most of whom are "progressives," time to trumpet their views. Let’s take another look at the Social Security situation.

How it actually works

During your working years, money is taken from your paycheck to finance your future government retirement check, right?  Wrong.  Money is taken from your paycheck to finance government spending, including the Social Security checks of current retirees.  Not a dime is put in an account with your name on it.  A notation is made in your Social Security records which indicates that you have made a payment.  A number is written down in a ledger, nothing more.  The money goes into the General Fund, where it can be used for any purpose Congress wishes.  This means that unless things change, the very day you retire, your Social Security account will be empty.  It will contain zero funds.  No money, at all.

Thus, the check you receive at that time, and all of the checks to follow, will be paid with money from other people’s paychecks.  Since it takes the donations of a number of working people to make up one retiree’s Social Security check, this means that the entire system is a Ponzi scheme.  That is, a "pyramid" scam that if done by somebody in the private sector constitutes an illegal scam.  A hustle.  A con job. 

The Bush Solution

Now, George Bush, whose version of straight talk makes Kerry’s look like criminal stupidity, studied this problem, and said the perfectly logical thing – this scam works as long as the population is growing.  All Ponzi schemes work when the contributor base is rapidly expanding.  The problem comes when the contributor base expansion slows down, or stops.  Then, the whole plan collapses.

You have heard that somewhere in the near future, Social Security will be facing a great big problem.  You have heard that the Baby Boomers have something to do with it.  (There are so many of them, and they are about to retire.)  All that is true.  They have been the large base of the Social Security Ponzii scheme.  For the smaller number of workers behind them, the job of paying the Boomer Social Security checks will be impossible without raising their SS contributions sky high.  (Fewer people paying  a larger bill means higher payments.)

Now, with a private Ponzi scheme, most of the people who put money in lose all that money when the pyramid collapses.  This is because the private Ponzi scheme management team cannot force people to give them money.  In the case of a government Ponzi scheme, we have another situation.  People can be forced to keep paying, can be forced to pay even more.  If Congress says the people must pay more, the people must pay more.  If the people refuse, they will lose all their property, savings and investments, and even go to jail.  The government can take away anything you own if the representatives you voted for tell them to do it.

Since President Bush doesn’t like the look of all this, he suggested some improvements to the situation.  The main point he makes is that there should be actual money in your Social Security account, not just a notation that you sent in some money which was immediately spent by politicans and bureaucrats to buy votes.

Bush has an interesting idea, here.

Liberals, of course, hate Bush.  Ever since he brought up the idea, they have been calling it "risky."  Using the stock market crash that happened during the late Nineties as a scare tactic, they have said that you shouldn’t go for a risky scheme like this.  (Knowing full well that the one that is the "scheme" is the one they are defending.)

Which one's the risky one?

If you are allowed to assign part of your Social Security payments in the private sector, it will be the best thing to happen to you and your country in years.  Forget the stock market if you don’t like historic long-term 7% gains.  Use the savings account option.  Bank accounts have guaranteed interest rates, and all deposits are protected by the federal government. 

(I would skip government bonds in this case.  They are secure, but are just another way to tap future taxpayers for money.  With the private sector, your growth comes from profits, which irritate all the socialists at our major universities.  Earnings which irritate liberals are twice blessed.)

There is no, repeat no, risk in putting money in your local bank.  Zero risk.  Nothing bad can happen.  Every dime you deposit is guaranteed.  The interest is guaranteed.  And, since that bank, like all banks, makes its money by making loans – and since a lot of those loans go to people who want to buy things, to build things and to start local businesses – the secondary result of money going into your local bank is more local jobs.  Did you know that small business, local business, creates 80% of all the jobs in America?

Did you know that by putting your Social Security contributions in that risk-free local bank account it will be first time you or anybody ever had an actual Social Security account with actual money in it?  Did you know that those who do it George’s way will not be leaving the financing of their retirement to their, and other people’s, children?  Did you know that if we don’t do it George’s way, we will be leaving the financing of people’s retirement to their and other people’s children?

Are you following this?  The risky way is to do what the critics of George Bush say.  They think (or claim to believe) that the safest place you can put your money is in the hands of politicians and bureaucrats.  Don’t you think they should either become standup comedians  or be put away in a mental institution?  Trust a politician or a bureaucrat with your money over your own local bank?  And, when the television boob tells you that makes sense, you sit there blank-faced, staring at the tube, nodding your head?

I will end this essay with one last point.

If you decide to trust the media, the politicians and the bureaucrats, on the day before you retire, your Social Security account will contain nothing but a bunch of  I.O.U.s which will be paid by futire  working Americans.  If you die on that day, your heirs will receive damn near nothing.  Decades of deductions from your paychecks will return enough to buy a box to bury you in, and a few hundred a month for your surviving spouse or minor children (fairly rare in the households of retirees). But, if you decide to trust your local bank, on the day before you retire, because of the magic of compound interest, even at 2%, your Social Security account will have a fortune in it.  If you die on that day, your heirs will be rolling in dough.

The present system is designed to keep you dependent on government, wide-eyed and afraid.  George Bush understands the power of compound interest applied over a working lifetime of deposits.  He wants you to retire with a giant wad of money in the bank.  He doesn’t want to put a lien on your grandkid’s property, possessions and paychecks to finance your retirement..  Brenda Braxton and Whatsisname of KGW-TV want you to retire without a dime in your Social Security account, totally dependent on a giant federal Ponzi scheme which will get every penney from the future paychecks of this country..

Which  do you prefer?  The advice of Baghdad Bob boobs, or compound interest on a savings account you own from day one?  The collapse of the Social Security system without massive payroll deduction increases -- or a short term General Fund burden followed by a drastic reduction in the size of a massive socialist redistributionist entitlement?

(LL) 

Note:  This writer began receiving his Social Security check on Christmas Eve, 2003.  Had the system during my lifetime been the one George Bush wants, I would have entered retirement with a fortune in the bank.

© 2004 Oregon Magazine   Graphics are links to their source.