The Social Security Trust Fund was created in 1937. Under law, the funds collected from the old age insurance program payroll taxes could not be placed in the general treasury. The reason? The amount you pay in Social Security "taxes" is theoretically not a taxit is a premium on your "old age and survivors' benefits."
Wary Congressmen who understood the propensity of government for the reckless spending of your money were sure that Franklin D. Roosevelt's New Deal bureaucracy would not be able to distinguish between general income tax dollars and old age benefits dollars, and would spend one just as quickly as the other if the Social Security dollars were not removed from their grasp. By law, the Trust Fund was supposed to be invested in high yield government securities with guaranteed rates of interest and a guaranteed returnand its proceeds, under law, could only be used for that purpose. That is, until politicians learned how to borrow the money.
In 1937 those investments were in marketable Treasury Securities. The rate of interest on these special issue Treasury bonds were determined by a formula enacted in October, 1960. With the passage of the Social Security Act of 1965 which created Medicare, it was inevitable that Medicare [HI Funds] (which is a separate trust fund from the OASI Funds and DI Funds within the Social Security Trust Fund) would begin tapping dollars from the Old Age & Survivors Trust Fund. As funds were shifted from the OASI fund to either the Health Insurance fund [HI] or the Disability fund [DI], an IOU was deposited to the OASI Fund.
The same thing happened when Lyndon Johnson's Great Society initiated the most massive "bondage program" since slavery was abolished by the 13th Amendment. (Let's call it Welfare Insurance [WI] even though that's not an official government designation. Yet it was, nevertheless, the fourth "I" draining the OASI revenue stream). Because of the demands of Lyndon Johnson's socialist welfare society (which financed the continued control of Congress by Democrats by shackling minorities to the government's feeding trough on Pennsylvania Avenue). Since around 1968 the Social Security Trust fund was split into two separate funds. The larger fund, OASI, contains only debt obligationsabout $2.7 trillion worth of debtthat the government owes to the taxpayers since they spent it.
The smaller fund, DI, contains what's left of the interest-bearing securities. Why? Because when the social progressive [Marxists] in the White House and Congress stole your retirement funds there was no money left to invest, which means the return on those investments which would have kept Social Security solvent for decades, was now nonexistent. Instead, Congress opted to charge themselves minimal interest on the "loans" the taxpayers made to them. Oh, waityou think no one asked you if you wanted to loan your old age benefits to the social progressives who claim to be looking out for your best interests? Don't fret. The social progressives asked themselves on your behalf. And, they said "okay" in your name. After all, you elected them to speak for you.
When is the underclass of America going to wake up and realize that the campaign promises of the social progressives (Democrats) who desperately need their votes to stay in office are, in reality, political posturing to create a prosperity illusion for the have-nots? It's an illusion that fades the day after every election.
On July 14, 2008 when candidate Barack Obama addressed the 99th Annual Conference of the NAACP, he said: "Social Justice is not enough. It matters little if you have the right to sit at the lunch counter if you can't afford the lunch. But the Supreme Court never ventured into the issue of redistribution of wealth and...[the]...issue of political and economic justice in this society...[T]he Supreme Court interpreted in the same way that the Constitution is a charter of negative liberties. It says what the States can't do for you. It says what the federal government can't do to you. But it doesn't say what the federal government or State government must do on your behalf."
Obama then promised to return to the NAACP's 100th Anniversary Conference to declare that the redistribution of wealth was taking place. He returned, but he didn't make that speech. About all he had to say was a soft-soap speech about his having benefited from the work of the NAACP. Unless the NAACP has a branch in Kenya and Indonesia, he didn't benefit from the work of the NAACP at all. Nor can he identify with America's blacks because his formation years were spent in a nation where the Whites were the minority.
His 2008 speech incited the black community which believed his political rhetoricthen. Shortly before the Election, a single black Florida mother, Peggy Joseph, took her children out of school to see Obama because she believed his NAACP speech. She told NBC News 6 she was excited because "...I never thought this day would happen. I won't have to worry about putting gas in my car. I won't have to worry about paying my mortgage. You know. If I help him, he'll help me."
Today, with black unemployment at 17.5% for black adult males and at 41% for black male teens, no one is standing in line to pay their rent, keep their lights on or put gas in their cars. Yet, Obama's redistribution is taking place. General Motors got their share. Several major banks got their share. The bank which received the most is in Indonesia. And the poor who are benefiting from Obama's redistribution are in the third world, working the job you lost last year, the year before or ten years ago.
That's why Social Security is bankrupt. America's jobs are gone, and 16.1% of the American people are drawing unemployment because the princes of industry and barons of banking had a grandiose scheme to create a global society and jumpstart the economies of the third world with the jobs of the industrialized nationswithout considering what would happen to the whole world when those economies collapsed.
(I tried to find the right words to describe what happens then. Someone else, also named John, said it best about 2,000 years ago. "...[T]he merchants of the Earth shall weep and mourn over her, for no man buys their merchandise any more...The merchants...who were made rich by her will stand afar off for the fear of her torment, weeping and wailing...For in one hour so a great riches are come to nothing." Rev. 18:11-15, paraphrased.)
When you look at the disastrous economic condition of the world you realize that that the economic ponzi scheme extends far beyond Social Securityand far beyond the borders of the United States.