US Public Policy .com

The United States of America has crossed the threshold into an "Era of Decline" (1999-????). Individual character and conflicting philosophies and beliefs will be severly tested. The "Era of Opportunity" (1975 -1998), period when socio-economic policies could have been changed to alter the future course of the Nation was wasted in further pursuit of a free lunch.  Legislation over the past quarter century have compounded defects in law and policy that evolved during the "Era of Lost Freedom" (1913 – 1979) and have severely eroded prospects for sustainable national prosperity. 

 In the "Information Age", the details of truth often get buried beneath the noise. The government assembles and analyzes data and releases information through the media to the public. The information is often true, supported by fact, but is sometimes inaccurate and misleading. It may be misinformation that is simply incorrect information or disinformation that is a deliberate plan to deceive.  There is no better example of how truth is concealed by public Myth than exposing defective laws that govern the US Social Security, Old-Age & Survivors (OASI), retirement program and the dubious accounting of the alleged OASI Trust Fund. 
  
Fueled by unsustainable levels of debt and trillions in unfunded social obligations, the U.S. Economic Ship of State is cruising in uncharted waters. Failure of U.S. public policy (federal, state and local) has created perilous social and economic conditions that have accelerated beyond control. Groundwork for these dire conditions has evolved with defective policies begun during the Great Depression. The age of citizen virtue has been replaced by an age of consumerism characterized by greed, manipulation and power stimulated by phony money and faulty tax and welfare laws.

This generation's buy now, pay later consumers realize and have accepted the notion that painless means of correcting flawed economic policies is impossible. The philosophy of debtism was created when the US government began to ignore Constitutional restraints on its power. Responsible citizenship was gradually replaced by consumers who, for the first time, were able to spend without benefit of savings; such was the power of the new plastic redeemable for goods and services worldwide. With this evolved the new American debt-slave. Buying things we don't need with money we don't have has become the American way of life.

In October 2007, the US Congress approved Treasury Secretary Henry Paulson’s request to increase the government debt ceiling by $850 billion from $8.965 trillion to $9.82 trillion, the fifth increase since Bush took office in 2001. It took this country 205 years (1776 to 1981) to accumulate $1 trillion in government debt that is limited by "statute," often referred to as the Public or National Debt. It has taken only 26 years to exceed $9 trillion, an 800 percent increase.
 
The $9 trillion federal debt is the tip of the iceberg. Total contractual American Debt (federal/state/local plus federal debt to trust funds, business, household, domestic financial sectors) exceeds $50 trillion. The Net Present Value (NPV - projected future expenditures less future revenues, in current dollars) of under-funded U.S. government explicit and implicit obligations such as military and civil service retirement programs, Social Security, Medicare, etc., add another $45 trillion to the nation's debt.
 
By dollars spent, the US Social Security program is the largest social-welfare program in the world. It is the most popular public program in the country. It is also the most misunderstood and possibly represents the greatest abuse or bungling of political power and public indifference to government capriciousness, in history. The "Social Security Act of 1935" was primarily created to provide an equity based retirement "Safety Net" for low wage workers, and for other purposes. 

 Social Security has evolved into a system that penalizes present workers who must pay two income taxes (FIT & FICA) and provides subsidized benefits to hundreds of thousands of wealthy pensioners, who enjoy 15% tax rates on dividends and capitals gains. Millions of beneficiaries are unaware that their Social Security benefits are monies confiscated from their own children and grand-children. They think the government is returning money taken from their paychecks during their working years. The government spent that money upon receipt, just as it is doing now. See Social Security History 

The dubious authority for the Social Security, OASI retirement program is the 16^th Amendment to the Constitution and misinterpretation or misapplication of the “welfare clause” to the Social Security Act of 1935.  Words in the preamble to the Constitution of the United States and the “welfare clause” Article 1, Section 8 appear ill-constructed or contradictory. 

 By identifying the contradictions between public myth and truth, defects embedded in fundamental law are exposed. The flaws may be corrected and the laws can be rewritten in plain English the public may understand. Social Security can be reformed and the economic path of the United States can be converted from perpetual debt to perpetual prosperity. 

Defects in the Social Security program are only symptomatic of larger US socio-economic problems of an income tax code that is fundamentally flawed and government accounting practices that hide the truth. By documenting the defects and the shocking financial results of the Social Security program, it is hoped comprehensive reforms will be demanded by an informed and outraged populace.
 
 The US government has significantly more financial liabilities than assets. The Social Security Old-Age and Survivors (OASI) Trust Fund has no real assets. The government has unsustainable levels of explicit and implicit debt and social obligations, imbeddded in law; and it is growing exponentially. Expressed in Net Present Value (current dollars), implicit and explicit financial exposures and obligations of the federal government exceed projected revenues over expenses by over $50 trillion dollars; an increase of 150% since 2000. The predictable outcome of current policy is perpetual debt and inevitable disaster. 

The dilemma facing Politicians today, is they are unable to figure out how to tell “Baby Boomers” (at the threshold of retirement) that there is no way they can get all the benefits they were promised during their working years. 

Like politicians, Federal Reserve (Fed) bankers also find themselves between a rock and a hard place. The Housing Bust (and contingent financial exposures) poses a threat of imminent recession. To forestall recession the Fed lowered interest rates and injected Tens of Billions into the Sub-Prime and Bank Credit markets. These actions increase the likelihood of higher inflation and contribute to further weakening of the US Dollar that has already lost over 80% (measured by the CPI) in purchasing power since 1970 and lost over 40% of its value against the Euro since January 2002. Further, fed actions may rescue the banks but does little to assist hapless victims who may lose their homes. 

There are no painless scenarios politicians, bankers or other public leaders can offer that can answer the challenge of changing the national course from a “Legacy of Perpetual Debt” to a realistic “Promise of Perpetual Prosperity”. Defective laws and policies erected on the fiat dollar are so deeply embedded throughout the US economy; options for change must be carefully weighed to avoid accelerating poor conditions into an economic and social nightmare.  

 Since passing the funding problems onto the next generation is becoming less and less doable, fundamental policy changes are inevitable.  When the public and the world become more fully aware of the magnitude of the U.S. debt situation and under-funded social obligations, serious implications for financial markets and the U.S. dollar will develop. There is an abundance of evidence that this has already begun. 

The population of those eligible for Social Security is expected to almost double over the next 25 years. The GAO, to its credit, has in recent years attempted to shed some light on the enormity of the future funding problems of Social Security and Medicare. Alarms sounded by the GAO in identifying significant funding shortages  has fallen on deaf ears in the US Congress and at the Executive Branch, both of which keep piling up mountains of debt instead of solving problems that become more difficult with each passing day. At a rate of only 5%, interest on over $50 trillion owed by the government is more money than the IRS currently collects in taxes.  If this is not a recipe for disaster, the word has no meaning.   

The U.S. government does not provide appropriate accounting of financial resources to pay for future Social Insurance obligations. Proper amortization of un-contracted, under-funded pension (Social Security) and health care (Medicare) benefits is achievable. Needed reforms are not likely unless public outrage compels politicians to fulfill their oaths of office, and to stop lying or hiding the truth. 

Through thorough public understanding of policy particulars, defects can be recognized, challenged, and changed. The process of learning leads to insights that can provide practical solutions to complex problems. A problem is just a question mark waiting for an answer. 

Grass-roots, class action lawsuits filed against the federal government for the unconstitutional act of imposing two income taxes on wages may offer the last option to force essential modifications to failed policies, before the politicians, bankers, international corporations, and “Special Interests” bankrupts the USA.