Ron Paul: “Politicians Must Stop Stealing from Seniors and Our Future”
Here’s a great commentary by Congressman Ron Paul. He quotes an economist who says that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today!
Ron Paul: There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year?
According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!
The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.
For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.
I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.
It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.
Does Social Security Save $300 Million Per Year By Rounding Down Benefits?
Social Security routinely rounds down the benefit amounts paid to the next lowest full dollar amount – even if the original amount would have included more than 50 cents. For example, if they calculate that your benefit is $685.90, you only get $685. But as there are 90 cents, most people would round it up, not down (if rounding is necessary at all).
This is not an error but an actual policy of Social Security. It wasn’t always that way; the new rule took effect in June 1982, as a result of PL 97-35, The Omnibus Budget Reconciliation Act of 1981 (enacted 8/13/81). [thanks to Larry]
Multiplied by 50 million SS recipients, the amount not paid out because of this rule amounts to approximately $300 million per year. What happens to this money? It’s simply not paid out and therefore remains available for future payouts. But some people are worried that somebody else might be collecting their missing cents, which is a pretty reasonable concern, but fortunately not true.
“I got a fifth-grade math problem for Social Security. The question is, I was told that I will get a benefit of $685.90 by their letter to me. But I have been getting only $685. They shortchange me by 90 cents. So my question is what happened with 90 cents? I don’t know. So I called and I was told that they just drop off 90 cents. It just disappears. I don’t know where, but it just disappears. Now, I was taught that when you round to the last one dollar, you’re supposed to round up if it’s more than 50 cents, so that makes sense that I should get a check for $686 and not $685. But they gave me $685 and they’re saying 90 cents they just drop off. They don’t worry about it.
Well, somebody is collecting those 90 cents. Now, the simple same typical math problem, we can extend that, too. Today there are 50 million people collecting Social Security checks every month. So on the average, they’re collecting 50 cents for every Social Security recipient per month and there are 50 million people so they are collecting $25 million per month times 12, that’s $300 million per year. What happened to those $300 million? Why can’t we get that back? Why are these other people, Citigroup, Bank of America, they are still getting… “
Social Security and the Farmer (1955)
Here’s another great SS infomercial from the 1950s.
Narrator: A day different from all other days dawned on the farms and ranches of the United States late in 1954, when Social Security was extended to cover farm operators for the first time, and to cover many more hired farm workers than before. This was an important day for more than five and a half million people who raise the food and fiber to feed and clothe the nation, who bring forth a living for themselves and their families from farm and ranch, from garden and orchard and field, for people like Jim Peterson. Jim’s been farming for 30 nyears, going it alone most of the time. He’s getting older now, and he’s beginning to admit it even to himself.
Jim was required to pay the Social Security self-employment tax along with his income tax beginning with 1955. What does this mean today for Jim Peterson?
What about Charlie Rogers, a farm worker who follows the harvest from state to state? Just as he’s starting a new job, he finds he’s lost his Social Security card. Why is this so important to him?
And how about Frank Johnson? He owns a large farm, employs a good many workers, some are short term people from nearby. But this year, he’s going to need to hire some migrant workers. Frank knows pretty well what to do about his own Social Security, but how can he be sure he’ll have the records he needs for his hired workers, who also are now covered by Social Security?
And what can Mary Clark look forward to? Her husband was killed in a farm accident a few weeks ago. She knows that she and the children can depend on her parents if she needs help. Her mother comes over to take care of the children when Mary goes to town. Mary is determined that neither she nor the children shall be a burden on anyone. What does Social Security mean for her?
We go, as anyone with questions like these should go, to the Social Security District Office for answers. Read more
Social Security: The Key To Your Future (1955)
Here’s a great infomercial about Social Security. It was made in 1955. Back then, the Social Security tax rate was only 2%. It was raised to 4% in 1956, to 6% in 1961, and it is now at 12.40% plus 2.90% for Medicare, for a total of 15.30%.
… for the first time in 1951 or in 1955. Perhaps you remember taking the step Tom Reynolds is taking here, applying for his Social Security card. Tom Reynolds is self-employed, and like about 8 million other self-employed people he is covered by Social Security. He reports his earnings every year when he pays his federal income tax.
Perhaps for you, as for him, old age is a long way off and when you reach 65 you may decide to continue working. Your Social Security account doesn’t mean that you intend to retire. Once the account has been opened, the key to your future is in your own hands.
This is the key. Behind it are monthly payments that will be waiting for you when you retire after 65 or after 72, whether you retire or not. They will also be ready for your family when you die, whether you reach 65 or not.
Or suppose that this is your office, a big white barn on a mid-western farm. Suppose you’re a farm hand like Alvin Decker here or a self-employed farm operator, then you, too, probably are covered by the new Social Security law. Old age insurance will be mighty comforting when you are no longer fit for work like this. That’s why you need to get your Social Security card now. Read more
Settle Tax Debt Fast!
Get Foreclosure Help
