Wednesday, December 24, 2008

Social Security will collapse just like Ponzi

Charles Ponzi started the first such scheme in Boston in 1916. He convinced some people to allow him to invest their money, but he never made any real investments. He just took the money from later investors and gave it to the earlier investors, paying them a handsome profit on what they originally paid in. He then used the early investors as advertisements to get more investors, using their money to pay a profit to previous investors, and so on.

To keep paying a profit to previous investors, Ponzi had to continue to find more and more new investors. Eventually, he couldn't expand the number of new investors fast enough and the system collapsed. Because he never made any real investments, he had no funds to pay back the newer investors. They lost all the money they "invested" with Ponzi. Ponzi was convicted of fraud and sent to prison for three years. After being deported to Italy in the 1930's, for a brief time, he became a economic adviser to Benito Mussolini. Then, he was sent to Rio de Janeiro as business manager for Italy's LATI airlines.

Just like Ponzi's plan, Social Security does not make any real investments -- it just takes money from later "investors," or taxpayers, to pay benefits to earlier, now retired, taxpayers. Like Ponzi, Social Security will not be able to recruit new "investors" fast enough to continue paying promised benefits to previous investors. Because each year there are fewer young workers relative to the number of retirees, Social Security will eventually collapse, just like Ponzi's scheme.

If an employer thinks the employee is subject to the tax, the employer should have to prove it. The U.S. Supreme Court has also already ruled that you can't be taxed for simply existing or exercising your right to work. "A state may not impose a charge for the enjoyment of a right granted by the Federal Constitution." Murdock v Pennsylvania, 319 U.S. 105, pg 113 (1943). In other words, such events must be taxable for revenue purposes and a law must have been enacted that imposes a tax on that activity or event. If it is law, it would be in the books. When the employer says you are required to submit a social security number or fill out a withholding form as a condition for being hired, is it based on a federal law or statute or just an employer making it up? I have a letter from the Social Security Administration that says "The Social Security Act does not require a person to have a Social Security Number to live and work in the United States, nor does it require a Social Security number simply for the purpose of having one."

On the IRS website, there is a paragraph that reads "Social Security and Medicare taxes pay for benefits workers and their families receive under the Federal Insurance Contributions Act (FICA). Social security taxes pay for benefits under the old age, survivors, and disability insurance part of FICA. Medicare taxes pay for hospital benefits." What this paragraph does is confuse the tax itself with the spending power. Taxes, regardless of their name are just that, taxes. They are not earmarked to any program regardless of the revenue act in which it is collected under. There is no such thing as a Social Security Trust Fund, nor is it anything related to paying insurance premiums. All these taxes, being uniform are taxes on certain activities and privileges and thus go into the general fund at the Treasury Department. 'We must conclude that a person covered by the Act has not such a right in benefit payments as would make every defeasance of "accrued" interests violative of the Due Process Clause of the Fifth Amendment.'
Flemming v. Nestor, 363 U.S. 603 (1960).

According to the Social Security Administration, "Conceptually, the old-age insurance program was a social insurance program with an obvious connection between the taxes collected in Title VIII of the Act and the benefits paid in Title II of the Act. The taxing and spending provisions of the Act were placed in separate titles in the vain hope of convincing the courts that what was obvious was not the case--that is, so that the argument could be made that the taxing and spending provisions had nothing to do with each other."

The proceeds of both taxes are to be paid into the Treasury like internal revenue taxes generally, and are not ear-marked in any way. Section 807(a), 42 U.S.C.A. 1007(a).
Helvering v. Davis, 301 U.S. 619 (1937)

(a) The proceeds of the tax in controversy are not earmarked for a special group.
Steward Mach. Co. v. Davis, 301 U.S. 548 (1937)

1 comment:

piratenewstv said...

I've been waiting on my Social Security Disability pension for 11 years. Seems that SSA ALJ judges NEVER read medical files, and use secret forms like Residual Functional Capacity Questionaires. I've already gotten one ALJ judge fired, after winning an appeal in fed court. But still no pension.

But illegal aliens get paid full SS pensions after 18 months in USA, thanks to Totalization Agreements. Illegal aliens from Russia get $60,000/year SSI pensions, despite never paying US taxes, with immunity from deportation.

My wife's VA pesnion was stolen, as perped against 95% of all disabled retired veterans. Now Jews in Congress want to pay military pensions for Russian soldiers, who not only never served in US military, but who killed US soldiers in Cold Wars.