The Right Opinion

Official Lies

By Walter E. Williams · Jan. 30, 2013

Let's expose presidential prevarication. Earlier this year, President Barack Obama warned that Social Security checks will be delayed if Congress fails to increase the government's borrowing authority by raising the debt ceiling. However, there's an issue with this warning. According to the 2012 Social Security trustees report, assets in Social Security's trust funds totaled $2.7 trillion, and Social Security expenditures totaled $773 billion. Therefore, regardless of what Congress does about the debt limit, Social Security recipients are guaranteed their checks. Just take the money from the $2.7 trillion assets held in trust.

Which is the lie, Social Security checks must be delayed if the debt ceiling is not raised or there's $2.7 trillion in the Social Security trust funds? The fact of the matter is that they are both lies. The Social Security trust funds contain nothing more than IOUs, bonds that have absolutely no market value. In other words, they are worthless bookkeeping entries. Social Security is a pay-as-you-go system, meaning that the taxes paid by today's workers are immediately sent out as payment to today's retirees. Social Security is just another federal program funded out of general revenues.

If the congressional Republicans had one ounce of brains, they could easily thwart the president and his leftist allies' attempt to frighten older Americans about not receiving their Social Security checks and thwart their attempt to frighten other Americans by saying “we are not a deadbeat nation” and suggesting the possibility of default if the debt ceiling is not raised. In 2012, monthly federal tax revenue was about $200 billion. Monthly Social Security expenditures were about $65 billion per month, and the monthly interest payment on our $16 trillion national debt was about $30 billion. The House could simply enact a bill prioritizing how federal tax revenues will be spent. It could mandate that Social Security recipients and interest payments on the national debt be the first priorities and then send the measure to the Senate and the president for concurrence. It might not be a matter of brains as to why the Republican House wouldn't enact such a measure; it likes spending just as the Democrats.

I believe our nation is rapidly approaching our last chance to do something about runaway government before we face the type of economic turmoil seen in Greece and other European nations. Tax revenue has remained constant for the past 50 years, averaging about 18 percent of gross domestic product. During that interval, federal spending has risen from less than 20 percent to more than 25 percent of GDP. What accounts for this growth in federal spending? The liberals like to blame national defense, but in 1962, national defense expenditures were 50 percent of the federal budget; today they are 19 percent. What accounts for most federal spending is the set of programs euphemistically called entitlements. In 1962, entitlement spending was 31 percent of the federal budget; today it is 62 percent. Medicare, Medicaid and Social Security alone take up 44 percent of the federal budget, and worse than that, it's those expenditures that are the most rapidly growing spending areas.

Our federal debt and deficits are unsustainable and are driven by programs under which Congress takes the earnings of one American to give to another, or entitlements. How long can Congress take in $200 billion in revenue per month and spend $360 billion per month? That means roughly 40 cents of every federal dollar spent has to be borrowed. The undeniable fact of business is that a greater number of people are living off government welfare programs than are paying taxes. That's what's driving Europe's economic problems, and it's what's driving ours. The true tragedy is that just to acknowledge that fact is political suicide, as presidential contender Mitt Romney found out. We can't blame politicians. It's the American people who will crucify a politician who even talks about cutting their favorite handout.

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9 Comments

Howard Last in Wyoming said:

Dr. Williams, you have it correct, the Republicans are almost as bad as the Democraps. The Republican Leaders (still an oxymoron) go along to get along or are RINO's. Take a look at who they nominated Ford, Dole, Bush the Elder and Younger, McCain and Romney. They all qualify as Democrap Lite.

Wednesday, January 30, 2013 at 12:42 AM

G. Daylan in Peoria, IL said:

Another great article Dr. Williams.

Wednesday, January 30, 2013 at 4:44 AM

Tod the tool guy in brooklyn ny said:

Downsize Government, so that the private sector can blossom! Follow the Reagan-Friedman Blueprint. Repeal Dodd-Fwank and the PPACA2010! "All wealth is the product of LABOR." John Locke "If a man will not work, then neither shall he eat!" God said it---deal with it! The Neo-Marx Commies will lose, because they are fighting against God! Pagan, Traitor Reprobates---Away! Great blog Mr Williams!

Wednesday, January 30, 2013 at 5:47 AM

Barbara Lasley in Louisville,KY replied:

You, Tod in Brooklyn are right on and, Mr. Williams, excellent article and the truth, and I don't see any change coming, because we have too many on both sides of the fence pulling in the wrong direction at the same time, and the ones who could make any changes, are too outnumbered by the self-centered and self-serving.

Wednesday, January 30, 2013 at 6:16 PM

rab in jo,mo said:

There you go again, Dr. Williams, injecting rational economic thought into government. :)

Wednesday, January 30, 2013 at 8:03 AM

wjm in Colorado said:

40 cents of every federal dollar spent has to be borrowed

It is borrowed by our own government, via the printing press. The value of the dollar continues to plumet, as the printing presses continue to produce worthless paper. At some point, the world will not recognize the dollar as its currency, and will replace it. That will collapse our government, and the dollar will be totally worthless. Like Weimar Germany, it may take a thousand dollars to buy an egg. An American Family would be bankrupt and jailed if they tried to print checks based on fantasy, and pay thier bills, this is what our government is now doing. The colapse is coming. Unlike Greece, there is nobody to bail out America when the dollar is rejected.

Wednesday, January 30, 2013 at 10:24 AM

Travis in Texas said:

Yes! The liberal left have tapped into the appeal of "free" stuff by way of "entitlements". This undoubtedly buys them a lot of votes. Want more free stuff? Okay, we'll just increase taxes..

The left-wing has no qualms about stealing from the wallets of taxpayers. It's what they're all about. Big government requires a lot of money. That's what we, the American taxpayers are for. We work and earn money so that we can fund their waste.

I'm still waiting for ignorant, uninformed, and deadbeat voters to finally wake up. Oh, wait.. they never will. Can our "leaders" on the right side of the aisle come to their senses... hmm... that might be a long wait as well.

Wednesday, January 30, 2013 at 2:55 PM

HP in KAlispell, MT said:

And while we're at it, let's give amnesty to another 12 million Marxist voters. Sorry, I didn't mean to change the subject from the economy like the Dumbs and RINOs have.

Thursday, January 31, 2013 at 12:52 PM

Tapdaddy in Indiana said:

"Just take the money from the $2.7 trillion assets held in trust."
That's kind of like the lie called the "lock box," isn't it?

Thursday, January 31, 2013 at 3:42 PM