Whenever the federal government runs a deficit, it borrows money from investors to make up the difference. Rather than cut back, Congress and the administration borrow in order to continue spending as much money as they planned in the budget. And borrowed money runs up the national debt.
If the government takes in more money than it spends, then we would have a surplus or what you might call a profit. Any cash left in the U.S. Treasury at the end of the fiscal year on September 30th would automatically be applied to outstanding obligations and the national debt would go down.
The federal government is a not-for-profit organization required to bring its books to a zero balance at the close of the fiscal year and, by rights, if there is an excess it should go back to the people or against the debt which, of course, is the people’s obligation.
It’s pretty simple so far, isn’t it? Here’s the complicated part.
1) The way a not-for-profit organization can move money from one fiscal year to another is in a trust fund. The federal government has about 157 different trust funds, only 14 of which are real. The others, including the Social Security trust funds, are fraudulent as hell and hold nothing but debt markers.
What it amounts to is that American workers might just as well have walked into the U.S. Treasury, plunked down a fistful of money, and said: Here, give me some debt. (More on this in a moment)
2) Despite everything you’ve heard, there has never really been a surplus. In the last twenty-five years, the national debt has done nothing but go up every year. It has never gone down. How do you explain that if surpluses automatically go against the debt?
In fiscal 2000, when we were told that the government accumulated a $237 billion surplus, the greatest surplus ever, the national debt still went up $18 billion.
Bill Clinton and Al Gore were not lying to us when they said they were “paying down the national debt.” They actually applied $230 billion of the fiscal 2000 surplus against the debt. They simply left something out, forgot to mention it.
The same thing happened in fiscal 2001, the first year of the Bush administration when Ari Fleischer kept reminding reporters that the government was enjoying the second largest surplus ever, a surplus of $127 billion. He wasn’t exactly lying either, but the national debt went up $133 billion in fiscal 2001 due to something Mr. Fleischer conveniently forgot to mention.
What is this mystery element upsetting the apple cart?
There are two sides to the national debt, (1) honest borrowing from investors under contract and (2) the pretense of borrowing money from entitlements like Social Security, and seventeen others, when actually stealing their overcharges or so-called surpluses. Both add to the national debt, but the second is the culprit.
Only once, in fiscal 2000, did we actually have a surplus from individual and corporate income taxes. In 2000, this income tax overcharge/surplus was $87 billion and the Congressional Budget Office (CBO) predicted it to grow to an accumulation of about $2 trillion by the year 2010. It is this real income tax overcharge that President Bush has been cutting and returning to taxpayers, as well he should.
At this point it’s worth noting that the first big tax cut of 2001 and the restructuring of income tax brackets took care of about $1.6 trillion of that ten year overcharge/surplus, leaving about a $400 billion excess over ten years. Now you know why the Senate limited this year’s second tax cut to $350 billion.
In fiscal 2000, the year of our greatest so-called surplus, the figures were $87 billion from income tax overcharges and $150 billion stolen from entitlements like Social Security (87+150=237). In that year, Social Security overcharges equaled $95.4 billion and the seventeen other entitlements totaled $54.4 billion. The national debt went up $18 billion.
In fiscal 2001, entitlements produced a record $160.7 billion excess/overcharge/surplus, but income taxes were in deficit a minus $33.5 billion (160.7-33.5=127.2). Social Security and other entitlements accounted for the entire surplus and then some.
The hooker.
To carry out the pretense of “borrowing” entitlement over-taxation, at the same time maintaining the greatest implied contract of all time that completely negates and obsoletes old Supreme Court decisions likeHelvering vs. Davis of 1936, the pirates deposit phony bonds in equally phony trust funds dollar-for-dollar. These deposits increase the national debt.
In other words, the government takes every surplus dollar contributed to Social Security and other entitlements as fast as it comes into the Treasury, spends that money elsewhere then, wanting you to believe that the same money can be both spent and saved, deposits UOU bonds in an entitlement distrust that increases the national debt. These debit black hole accounts that they label “trusts” hold nothing but debt.
This is what I call the Pay-It-Again Sam scam because, in the case of Social Security, the same workers (or their offspring) who contributed the surplus in the first place will someday have to redeem it, plus interest.
In the case of unemployment taxes, the general taxpaying public is repaying a tax already paid by employers. In the case of Military Retirement surpluses stolen, the general public is repaying what military people contributed in surplus but the government stole, and so on, and so on through seventeen entitlements other than Social Security. They’re all in the same boat.
And we are being double taxed on some of these right now, today, as you read this.
It gets worse, because the government not only steals money from entitlements but adds annual interest on top of that—compounding the crime. Most news hounds and watchdogs forget this element and think that because the Social Security trust funds increased $162 billion in fiscal 2000 Social Security actually had a surplus of that much. It isn’t true. The real surplus was only $95.4 billion and the rest was interest added at no cost to the government. They simply hand the trust more bogus bonds.
You can follow this excess taxation yourself by watching how much the Social Security trust funds increases any given year, then subtracting the amount paid in annual interest against the last year’s balance. You can get both figures from the U.S. Treasury web pages.
It’s also important to note that the only reason for adding this ludicrous interest, and increasing our indebtedness, is to maintain the fiction of borrowing. It also solidifies the more than sixty year old implied contract. It’s your retirement money they’re stealing.
Deficits
When you hear politicians and others talk about the huge deficits we can expect this year and for many years into the future, you must remember that they are not counting the money stolen from entitlements.
These so-called “surpluses” are built into the annual budget as “off budget” revenue. If it’s part of the budget, it cannot be counted as “over budget” in their Enron style accounting.
For instance, when democrats are warning about as much as a $500 billion deficit being deliberately planned for next year, fiscal 2004, they are not counting the nearly $200 billion that will be stolen from entitlements at the same time and bringing the real deficit to $700 billion. That’s how much the national debt will increase.
The real deficit for any given year is the amount of money the government must borrow to stay afloat, to maintain the preposterous budget they’ve planned and the wars they want to conduct. This includes the amount of money they pretend to borrow but actually steal (there’s no other word for it). And it includes the interest that they ludicrously pile on top of it to maintain their borrowing fiction.
This is fraud on a major scale.
Just follow the national debt increases—that’s the real deficit. Everything else is just bull shit in the same fashion we got it from Enron, but on a much larger scale.
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”