Surpluses not gone: Just buried Enron style

Published 16 years ago -  - 16y ago 40

Nitwits who don’t have a clue where surpluses came from in the first place are now complaining that surpluses have disappeared. Oh, woe is us, we had it so good and now it’s all gone.

What do they expect? Do they really believe that the Beltway Bandits are going to walk up and correct them? Do they really believe that the crooks are going to say; hey, surpluses are still there, they’re just buried in the budget as “off budget” receipts that you’re too dumb to notice.

Anyone familiar with double bookkeeping, anyone like Enron’s Ken Lay or the accountants of Arthur Andersen, should be able to immediately spot this deception. It’s one of the same crooked techniques hundreds of American companies have used to show false prosperity and defraud people.

Tantamount to all of this is the federal government as teacher, or should we say lack of teaching through controlled funding of public education and the “dumbing of America,” while people like Ken Lay were educated elsewhere? Isn’t it obvious that statements like “they should all be in handcuffs” are nothing but talk from another insider while the guilty go free? How can the teacher punish students that aced the course?

In fiscal 2000, the government claimed that it had a surplus of $237 billion, the greatest surplus this country has ever enjoyed. But they didn’t tell you where it came from, did they? Of course not, why should they?

During the same fiscal year the Clinton administration paid $230 billion against the national debt, which they were quick to point out and brag about whenever given the chance. But the national debt went up $18 billion anyway because that huge amount still wasn’t enough to reduce the principal. They didn’t tell you why that happened either, did they?

Anyone who bothered to look into the surplus subject would have found that $87 billion of this 2000 surplus came from personal and corporate income tax overcharges. The rest, $150 billion, came from entitlement overpayments, $94.5 billion from Social Security alone, overcharges that were not part of the payout to the currently retired and disabled because it wasn’t needed.

Wouldn’t you say that $94.5 billion in profit/overcharges was pretty good for an organization that’s supposed to be in trouble?

During his first year in office, the Bush administration enjoyed the second largest surplus in U.S. history—$127 billion in overcharges. But this time, every bit of the surplus, every dime of it came from entitlements with Social Security leading the pace with a $98.7 billion profit for the government to enjoy.

The Bush tax cut took care of about $38 billion of the income tax surplus that the government had been wallowing in and 9/11 took care of the rest. Huge expenses in the last month of the fiscal year that ended on the last working day of September cost a bundle. If entitlements hadn’t produced a $160 billion surplus we would have been in deep doo-doo during fiscal 2001. Instead, the government reported the second largest surplus in history.

Now, we’re running “deficits as far as the eye can see” and everyone believes that means surpluses are gone. Wrong.

During fiscal 2002, Mitch Daniels, the newly resigned head of the president’s Office of Management & Budgets (OMB) claimed that the government ran a $158 billion deficit, but the national debt increased $421 billion (the real deficit). And guess what? Social Security still produced an $89 billion surplus despite high unemployment, fewer workers contributing payroll taxes, and many working at jobs that pay less which amounts to the same thing.

$94.5 billion to $98.7 billion to $89 billion, does that look like surpluses are gone? Declining perhaps, but disappeared—no.

When times are good, the government drags out the “unified budget” to tell you how large a “surplus” they have, but they don’t bother to mention that most of it, if not all of it, comes from entitlements like Social Security and seventeen others.

When times are not so good, when they’ve been running up the national debt or borrowing us into oblivion, they turn to another form of accounting called “over budget” or running a deficit.

In this second form of accounting, the entitlement surpluses are included in the budget as “off budget revenue.” How much Social Security and seventeen other entitlements would produce in overcharges was included in the budget and planned for years in advance of taking it as fast as it comes in and spending it elsewhere. If it’s in the budget, it can’t be counted as “over budget” can it?

Trouble is, this same “off budget revenue” was also present when they were talking about grand surpluses in the “unified budget.” In this case, it was counted both as an asset and a debit. It was an asset when they called it a surplus, and it was a deficit when it raised the national debt.

That’s double bookkeeping plain and simple. That’s fraud produced by the masters, the teachers, and an example to the rest of the world from our lawmakers—if they can do it, why not everybody?

It gets worse.

Because they don’t want you to realize that they’ve been stealing this entitlement money and, in the case of Social Security, backing down on the granddaddy of all implied contracts with a society of taxpayers, these crooks have developed an elaborate scam to make you believe that they’ve merely “borrowed” the money.

They put special obligation nonmarketable Treasury bonds, securities developed specifically for the occasion, in debit black hole accounts deceptively labeled “trust funds” but having absolutely no relationship to the honest stewardship of property or even simple vaults or lock-boxes. There is nothing of value in these phony trusts and they admit it.

Dollar-for-dollar, these phony trust funds add to the national debt, plus annual interest that is added at the rate of six to seven percent per year, even when legitimate bonds contracted honestly with investors might be paying much less.

In defense of this scam, Alan Greenspan, the head of the Federal Reserve, claims that they only thing mattering is that these phony securities “are enforceable.” When the time comes, when any of the entitlements find it necessary to draw upon their phony trusts, the cash will come out of the general fund of taxpayer dollars on hand at the moment.

In other words, the taxpaying public will again pay taxes that were paid previously but stolen—and they’ll pay interest on top of it.

That’s double taxation folks and it’s happening right now. As you read this, some of the smaller distrust funds are being drawn down and the double taxation plus interest is coming out of your recent income tax payments.

For instance, since this recession that’s not a recession first started the Unemployment Trust Fund holdings have gone from $94 billion to a March 31, 2003, balance of $49.3 billion. That means that you, the taxpayer, have paid $44.7 billion to cover unemployment compensation and extended payments beyond the money employers have been sending in. That’s $44.7 billion that employers paid before but the government stole and spent elsewhere, plus interest.

In fiscal 2002, the Unemployment Trust Fund was drawn down $23.3 billion and at least ten other smaller trusts were drawn down for a total of $46.6 billion in that year. It’s all much worse this year, fiscal 2003.

All of this is merely a portent, an example, of what is going to happen when the larger bogus accounts like Social Security’s current $1.3 trillion holdings are required.

And where are the watchdogs? Well, we can only conclude that they are either too stupid to see what’s going on or they are earning their million dollar salaries by spreading the government’s scam propaganda.

Published originally at : republication allowed with this notice and hyperlink intact.”

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