Are they lying now or were they lying then?

During the recent Congressional debate on raising the debt ceiling, the President gave us a stern warning. Answering a CBS reporter who asks if Social Security checks would be delayed if the government shut down, the President said, “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue because there may simply not be the money in the coffers to do it.” This message was repeated later by Treasury Secretary Timothy Geithner on CBS Meet the Nation and again on a number of occasions by the President.

I find this statement curious because last February President Obama’s budget director Jack Lew, in a USA Today article, had this to say about Social Security. “Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries. … Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.”

Syndicated columnist Charles Krauthammer wrote an article responding to Mr. Lew’s comments and he called Lew’s statement “a breathtaking fraud” - a strong statement but completely accurate.

The problem, as Mr. Obama let slip is that while there IS a trust fund … it is completely empty.

By law, the Social Security Administration can only invest the trust fund in funds fully backed by the United States government, which means government bonds are the only option. Every single dollar that is not paid out to citizens in the form of benefits is loaned to the federal government. The funds are tracked in their own accounting system but the Social Security surplus exists only as IOU’s from the federal government. When the Social Security Administration needs money it calls one of the IOU’s from the Federal Government due. If the government shuts down there is no money to pay back the trust fund and no money to pay out benefit checks.

So President Obama in a rare moment of candor has pointed out the big lie of Social Security. We are told it is some type of retirement fund, that our retirement money is safe, sound and held in a totally different account as opposed to just another government program financed by the general fund. In reality if the general fund stops paying its bills…. the social security check cease to go out.

Liberals are telling us that Social Security is not really in bad shape and we just need a little tweaking to make it solvent. But politicians have been telling us that for decades.

Eighteen times since 1939 the maximum amount of income to be taxed has been increased.

Fourteen times the percentage of your income taken for Social Security has been increased, and now stands at 12.5% (12 % paid by you and ½ % paid by your employer).

In the 1960’s, 1970’s, 1980’s, 1990’s Congress passed changes to the program that was supposed to make the program solvent for decades. In 1973, President Carter said of the newly enacted legislation, "This legislation will guarantee that from 1980 to the year 2030, the Social Security funds will be sound." He was off a bit, by the middle of the 1980’s (45 years earlier than he predicted) it was necessary to increase taxes and decrease benefits to shore up the program. In 1950 there was 15 workers for every person collecting social security, today there three and yet the liberals in Washington continue to act as if nothing has changed

The government has actually used the Social Security surplus to offset the debt in the general fund on paper. In 1968 under President Johnson, the trust fund balance was included in the regular federal budget, still tracked separately but any surplus in the trust fund helped offset the deficit in the general fund on the books. So although the federal government had borrowed and spent all the money in the trust fund, the government IOU’s that made up the surplus were subtracted from the federal debt. If you tried that accounting in private industry they would put you in jail. This type of government shell game was thankfully repealed under Reagan in 1983. As an interesting side note, when the Graham Rudman Bill passed in 1985 debt targets were set that would trigger automatic spending cuts in the federal budget. The thought was this would force Congress to be more fiscally responsible. When setting the debt limits that would trigger cuts, Congress again included the trust fund surplus so the federal debt looked lower than it truly was and that delayed the automatic cuts, some shell games are too good to waste.

And all the while, Congress is using the trust fund as their personal piggy bank, not to pay down the existing deficit, but to finance more and more programs with borrowed money. It is easy to see why in 2002 the Democrats in Congress fought so hard to prevent people from being able to invest 3% of their social security obligation in their own private retirement plans. That would mean 3% less that congress could not borrow.

We can continue to increase taxes and decrease benefits all the while financing more and more deficit spending OR we can demand the government get out of the retirement business and allow Americans to make their own retirement decisions.

Are they lying now or were they lying then?

Both - they lied to us then, they are lying to us now and I see no reason to think they will not lie to us in the future.

Some things are to good not to reprint 3

Imagine a league where players who make it through three seasons could never be cut from the roster.

By FRAN TARKENTON

Imagine the National Football League in an alternate reality. Each player's salary is based on how long he's been in the league. It's about tenure, not talent. The same scale is used for every player, no matter whether he's an All-Pro quarterback or the last man on the roster. For every year a player's been in this NFL, he gets a bump in pay. The only difference between Tom Brady and the worst player in the league is a few years of step increases. And if a player makes it through his third season, he can never be cut from the roster until he chooses to retire, except in the most extreme cases of misconduct.

Let's face the truth about this alternate reality: The on-field product would steadily decline. Why bother playing harder or better and risk getting hurt?

No matter how much money was poured into the league, it wouldn't get better. In fact, in many ways the disincentive to play harder or to try to stand out would be even stronger with more money.

Of course, a few wild-eyed reformers might suggest the whole system was broken and needed revamping to reward better results, but the players union would refuse to budge and then demonize the reform advocates: "They hate football. They hate the players. They hate the fans." The only thing that might get done would be building bigger, more expensive stadiums and installing more state-of-the-art technology. But that just wouldn't help.

If you haven't figured it out yet, the NFL in this alternate reality is the real -life American public education system. Teachers' salaries have no relation to whether teachers are actually good at their job—excellence isn't rewarded, and neither is extra effort. Pay is almost solely determined by how many years they've been teaching. That's it. After a teacher earns tenure, which is often essentially automatic, firing him or her becomes almost impossible, no matter how bad the performance might be. And if you criticize the system, you're demonized for hating teachers and not believing in our nation's children.

Inflation-adjusted spending per student in the United States has nearly tripled since 1970. According to the Organization for Economic Cooperation and Development, we spend more per student than any nation except Switzerland, with only middling results to show for it.

Over the past 20 years, we've been told that a big part of the problem is crumbling schools—that with new buildings and computers in every classroom, everything would improve. But even though spending on facilities and equipment has more than doubled since 1989 (again adjusted for inflation), we're still not seeing results, and officials assume the answer is that we haven't spent enough.

These same misguided beliefs are front and center in President Obama's jobs plan, which includes billions for "public school modernization." The popular definition of insanity is doing the same thing over and over, expecting different results. We've been spending billions of dollars on school modernization for decades, and I suspect we could keep on doing it until the end of the world, without much in the way of academic results. The only beneficiaries are the teachers unions.

Some reformers, including Bill Gates, are finally catching on that our federally centralized, union-created system provides no incentive for better performance. If anything, it penalizes those who work hard because they spend time, energy and their own money to help students, only to get the same check each month as the worst teacher in the district (or an even smaller one, if that teacher has been there longer). Is it any surprise, then, that so many good teachers burn out or become disenchanted?

Perhaps no other sector of American society so demonstrates the failure of government spending and interference. We've destroyed individual initiative, individual innovation and personal achievement, and marginalized anyone willing to point it out. As one of my coaches used to say, "You don't get vast results with half-vast efforts!"

The results we're looking for are students learning, so we need to reward great teachers who show they can make that happen—and get rid of bad teachers who don't get the job done. It's what we do in every other profession: If you're good, you get rewarded, and if you're not, then you look for other work. It's fine to look for ways to improve the measuring tools, but don't let the perfect be the enemy of the good.

Our rigid, top-down, union-dictated system isn't working. If results are the objective, then we need to loosen the reins, giving teachers the ability to fulfill their responsibilities to students to the best of their abilities, not to the letter of the union contract and federal standards.

Mr. Tarkenton, an NFL Hall of Fame quarterback with the Minnesota Vikings and the New York Giants from 1961 to 1978, is an entrepreneur who runs two websites devoted to small business education.

Reprinted from WSJ article