Judge Andrew Napolitano – Fox Freedom Watch
What happens when the public treasury becomes a public TROUGH!?
When FDR talked Congress into his idea of Social Security in 1935, he actually pulled a fast one. Social Security would be a savings account, he argued. You pay in a little each week, the federal government will hold the money for you. When you retire, he claimed, the government will slowly pay that money back to you. It won’t be a pension; it will supplement your savings. With the population increasing, he privately told his advisors, there would always be more money coming in than was going out. Then he let them in on a secret.
The secret was that this Devil’s pact–you pay in, and the feds pay out, from age 65 until you die–was rigged to favor the government. You see, in 1935, the average male American life expectancy was 60. The government didn’t start paying until age 65. So go for it, fellas, FDR boasted: We’ll make money on this deal.
Watching all this from the sidelines was a young Texas Congressman who was enamored with FDR’s regal style and ironclad control of Congress. Thirty years later when he was in the White House, he added health care to Social Security. He basically enhanced the Ponzi scheme with Medicare. The principle and the argument were the same. You pay in, the feds pay out. If you live beyond 70, you got more than you gave.
If you died before 70, the feds make money. This President–it was Lyndon Baines Johnson–also knew that most wartime presidents were considered great by historians. So he started a useless war in Viet Nam. Between that war and his new Medicare entitlement and FDR’s Social Security program, the government began to borrow heavily to pay all its bills.
We all know how wrong FDR and LBJ were. Eventually, folks started living longer. Eventually, the feds raided the bank accounts where the contributions to Social Security and Medicare were kept. Eventually, the payments that started out at $25.00 a month would go up to $2500 a month. Eventually, Congress would expand these programs to cover all workers, except for members of Congress themselves. Soon, Social Security and Medicare would be paying out much more than they took in. They would be seen for what they were–classic Ponzi schemes.
FDR and his misguided protégé, LBJ, committed fraud; the feds robbed bank accounts they were legally obliged to keep intact. Both programs now owe $70 trillion more than they have or are projected to take in. The baby boomers are retiring and entering the system at the rate of 10,000 a day. And we are stuck with all this.
The problems that FDR and LBJ dumped on us are unfair to us and unfair to the folks they were intended to help. Generations of hard working Americans who paid into the system are entitled to get that money back. But because the Congress permitted the Treasury Department to take the funds being held in trust, there is no money there to give back.
Stated differently, generations of hard working Americans were duped by the government when they paid into Social Security and Medicare. Their money didn’t go into an investment for them. It went to the same place that all federal revenue goes; to the Treasury–the federal trough–for politicians to spend as they wished.
The answer was debt. Use the Federal Reserve to print cash and lend it to the Treasury. That, of course not only created the legal obligation to repay the loans, it also devalued the cash already in existence. If you or I lied and duped and raided bank accounts like the followers of FDR and LBJ did, we’d be prosecuted. But Because the Congress writes the laws, it can write laws that permit lawlessness. As if all this weren’t bad enough, there is a specter haunting all this. It is the specter of dependency.
FDR and LBJ may have been liars and crooks, but they weren’t stupid. They knew if they could get generations of folks, generally in their senior years, to be dependent on the federal government for their income and their healthcare, those folks would vote to keep in power whoever promised them the most. And the public treasury would become a public trough. It is time for this dependency to end.
Originally aired 5/24/11 on FREEDOM WATCH