In the classic political satire, "Duck Soup," Groucho Marx, as Freedonia's proud leader, Rufus T. Firefly, tries to borrow money from Sylvania, assuring the ambassador from his rival nation that he would gladly give his personal IOU in return. "If I can't pay you back," Groucho quips, "you can keep the IOU." That's the same feeling I get when hearing politicians carry on about the "crisis" in Social Security, after Washington "borrowed" trillions of our retirement fund surplus, with apparently no intention of ever paying it back!

I couldn't help but cringe when I heard Sen. Barack Obama last week pledge to "shore up" Social Security by requiring those with incomes over $250,000 to pay the full 6.2 percent payroll tax. To avoid offending middle-class voters, he would exempt those above the current cap of $102,000, yet falling below $250,000.

This "soak the rich" scheme completely misses the point--which is that no tax increases are necessary if Uncle Sam would simply redeem all the IOUs Washington dumped in the program's trust fund in return for the massive Social Security surplus built up over many years.

That's right. What politicians fail to tell you is that Social Security has been running at a huge surplus for a long time now, taking in far more payroll taxes than it needs to pay benefits. But as the population ages and more people become eligible to cash out, that gap is narrowing.

It's expected that we'll be paying out more in benefits than we're taking in from active employees by around 2018 or so.

That would not be an alarming prospect, if the program had been managed responsibly, and if voters had been paying attention to how their government retirement funds were being handled.

But since the Supreme Court handed the presidency to George W. Bush in 2000, Al Gore never got a chance to create his patented "lock box" to protect the Social Security Trust Fund from raids by the Feds. And that leaves us in quite a pickle.

By "borrowing" the Social Security surplus and leaving us with T-bills in return, Congress and the White House did not have to risk the wrath of voters by raising income taxes or cutting the federal budget.

Man, are we suckers! We're constantly lectured about how the United States doesn't save enough, when in fact we've saved plenty via Social Security.

The only problem is that the Feds spent all our retirement money on other stuff (like wars and income tax cuts) rather than have the guts to tell us we either had to pay HIGHER income taxes, or live within smaller budgets. (We could have also floated more debt in the public markets by selling more T-bills, but how many more can China be expected to buy???)

As a result of Washington's cowardice and deception, as well as the American public's disgraceful ignorance and apathy, Social Security is the biggest pyramid scheme ever perpetuated!!!

And Sen. Obama, by insisting MORE payroll taxes are needed, is buying right into the BS we've been handed for years, rather than taking steps to clean up the real mess we're in.

What Sen. Obama should be saying is that as President he would see to it that all those T-bills gathering dust in the Social Security Trust Fund are redeemed as needed to cover benefits, even if that means raising income taxes or cutting the budget to do so. Otherwise, Social Security is just one big scam that dwarfs Enron, the subprime crisis, and the savings and loan debacle combined.

Of course, if he said that, he'd likely lose the election in a landslide. So he played it safe by promising to tax the rich to bolster a fund that is already trillions in surplus, so we can close a make-believe deficit.

If people pulled this in the private sector, they'd be prosecuted for fraud and sent to jail!

Of course, "Straight-Talkin'" Sen. John McCain is no better on this issue. I don't hear him vowing to make Uncle Sam pay his Social Security debts, regardless of the consequences. All he talks about is privatizing the program, which would leave this precious retirement fund to the not-so-tender mercies of the stock market.

Even if we did privatize Social Security, those T-bills would still be sitting there, waiting to be redeemed. And there is no way Sen. McCain would raise income taxes on anyone to pay back what his predecessors borrowed.

We're really getting a raw deal here. Could you imagine the chaos that would ensue financially if Washington announced it would not honor any more Treasury bills? China would probably declare war! The financial markets worldwide would crash. And Washington would have to live on a pay-as-you-go basis. (That part might not be so bad.)

Yet it's apparently okay for Washington to treat Social Security as some huge ATM, or, worse yet, as a subprime loan, with little chance of repayment.

We really need to speak out about this and demand some answers from Washington and the candidates running for the White House and Congress. You get the government you deserve, and if we don't hold politicians accountable, who will?

What do you folks think?

Special Reports /

Presidential Candidates Perpetuate Social Insecurity

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