Social Security Stalemate

Social Security is a budgetary trick that is virtually indistinguishable from a Ponzi scheme. Workers pay in, theoretically so that they will have something to take out when they retire. However, this money doesn't go into a lockbox. It goes straight to current beneficiaries.

There is no Social Security Trust Fund. There was supposed to be, but it ended up getting spent by our government. In it's place are billions in Treasuries, which when the time comes to cash them in, our broke-ass government will just print some more dollars, making those T-bills effectively worthless.

Social Security is broke, and any attempt to fix it is met with FIERCE liberal rhetoric, even though they bring no ideas on how to fix it themselves.

Bush's attempt to privatize Social Security went down in flames. Current Republican reforms are being met with cries that they are killing Social Security, and that they want old people to live in abject poverty.

The funny thing is, these attempts are actually trying to save Social Security, while the Left simultaneously sits on their hands and puts their fingers in their ears while Social Security sinks deeper into the red.

The time of Social Security reckoning will come, and we will know who really brought the pain.

Of course, both sides will continue to play the shell game. Once the program hits the wall, the Right will call for reforms and blame the Left for spending too much, and the Left will say the Right wants old people to live in the streets.

But we are catching on to their game.

Bernanke Prods Reform in Medicare, Social Security

Fed chief Ben Bernanke finally says what I've been saying for years: Medicare and Social Security are going to bankrupt this country if we don't do something soon.

Mr. Bernanke noted that the economy was still fragile, and he made it clear that he did not expect the federal government to raise taxes or cut spending anytime soon. But he spoke about the budget pressures posed by Social Security and Medicare with greater urgency than he has in the past.

“The arithmetic is, unfortunately, quite clear,” Mr. Bernanke said. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off any more.”

Democrats don't want to cut benefits, and Republicans don't want to raise taxes, but something must be done before it is too late.

Bernanke also commented on the Fed's response to the financial crisis, and added his two cents on financial reform.

“To end ‘too big to fail,’ the new regime should permit regulators to close a failing firm and impose losses on shareholders and creditors,” he said. “Indeed, I would argue that no financial instrument counted as regulatory capital should be allowed to receive any protection from losses.”

He's talking a good talk, but thus far it's only talk. We'll see if he practices what he preaches.

Social Security is Unconstitutional

Check it:

The Roosevelt Administration feared that the Court would rule that the Constitution did not permit federal tax-financed old-age insurance. While the Social Security bill was in Congress, the Court invalidated the Railroad Retirement Act, which resembled Social Security. So the Administration’s allies on the House Ways and Means Committee weeded the insurance language out of the bill and physically separated the tax and benefits titles in the text so they wouldn’t look like an insurance program.

Meanwhile, the Supreme Court hammered the New Deal. On May 27, 1935, in a crushing defeat for Roosevelt, it voided the National Industrial Recovery Act and the Frazier-Lemke Farm Bankruptcy Act. It struck down the Agricultural Adjustment Act on January 6, 1936, the Guffey Coal Act on May 18, and the Municipal Bankruptcy Act and a New York state law setting minimum wages for women on May 25.

Enraged, Roosevelt decided to subdue the Court. His megalomania inflated by his 1936 landslide, on February 5, 1937 he abruptly asked Congress to enact a bill empowering him to appoint one additional Justice for every one who turned 70 and did not retire, for a maximum of six, thus enlarging the Supreme Court from nine Justices to up to fifteen.

If you're interested in Contitutional Law (and why wouldn't you be?) then read the whole thing. You will (I hope) come to the same conclusion I did, which is that most Federal welfare programs are unconstitutional and illegal. You would think Obama, a former professor of Constitutional Law, would already know this.