Time and again, we've heard leading economists tell us that if and when the parent Social Security Administration must turn to its trust fund for money the poor dears in Washington will be faced with three tough choices to either: (1) raise taxes (2) borrow enormous sums from investors or (3) cut benefits budgeted in discretionary spending or from the currently retired and disabled. Of course, they can do any combination of the three.

No tax increase has occurred. The government can't borrow until the debt limit is raised. That leaves the third option, cutting spending or programs in the 2003 budget. If any entitlement needed money in March, if receipts were below obligations, then the entitlement turned to its trust fund or, more properly, took money out of the Treasury's general fund of today's income tax receipts. We will see this in a moment, but first it's essential to understand the following.

In the final analysis, the three choices mean that the so-called trust funds are both fraudulent and useless. These three choices are the government's normal way to raise revenue whether there's a trust fund or not. They are exactly the same choices government would face if the bogus trust funds didn't even exist.

The way we got these black hole debit accounts in the first place was part of the federal government's scam that I call the "Pay-It-Again Sam scam." Pretending to borrow entitlement surpluses that could have been put in a real trust fund just like the government's own Thrift Savings Plan or returned to taxpayers, the government steals the money, spends it elsewhere, and then plays this outlandish con-game to make it look like honest borrowing.

Whenever they steal surplus entitlement money, which is constantly, they place bogus "special obligation" nonmarketable Treasury bonds in an entitlement account dollar-for-dollar for the money stolen and spent elsewhere. At first, these markers appear as "certificates of obligation" that are periodically rolled over into nonmarketable bonds. Annual interest is also paid by depositing more of these bogus bonds with no money involved, but to continue the pretense of borrowing.

All of these so-called entitlement trusts make up a significant part of the national debt under the misleading title "Intragovernmental Holdings," a term that is meant to deceive the public into believing that the government owes itself, one department owes another, or that Congress can somehow accomplish the impossible task of paying back these amounts without using taxpayer money. It's all fraud and the national debt could be reduced by 43 percent by simply wiping these bogus bonds and fraudulent accounts from the books with no consequence to anyone but the perpetrators.

Not that it really matters, but these entitlement trusts never hold real money, not even for five minutes. What would be the sense of the Treasury depositing real cash receipts in the trust only to immediately withdraw the money in order to put it back in the general fund to spend elsewhere? In other words, there is no such thing as "raiding" the trust fund. How can you raid something that holds nothing but debt? The real money is always in the Treasury's general fund until spent and that's where it's raided. This is more than semantics.

The Treasury's general fund is composed of current tax receipts and money borrowed honestly from investors. Because the government was prohibited from borrowing in March, we can now look at how much came out of tax revenue budgeted for things like education, agriculture, defense, veteran's benefits, and any other part of fiscal 2003 discretionary spending.

Sorry for the long introduction, but here's a clip from Table 8 of the Treasury's Monthly Report for March. The full title for this table is "Trust Fund Impact on Budget Results and Investment Holdings as of March 31, 2003." You can verify or look at the entire table by going to the Treasury's current Monthly Report, clicking to the very end in PDF format and backing up two pages.

Notice the minus signs in the "Excess" column. At least nine entitlements drew down on their phony trust funds during March. Receipts were not as much as Outlays.

The total draw-down in March amounted to $16.5 billion in double taxation. Let's take a look at some of these accounts in more detail.

Unemployment

During March, employers paid $474 million in unemployment taxes, but payments and extended payments to the currently unemployed were $5.4 billion (FIVE BILLION, THREE HUNDRED AND SEVENTY THREE MILLION DOLLARS).

That means the Labor Department took $4.9 billion from the general fund of individual and corporate income taxes in order to meet its full obligation to the high number of workers currently unemployed and drawing compensation. And the taxpaying public was double taxed for taxes paid previously by employers but stolen by the government.

This was all money that would otherwise have gone to discretionary programs. Witness the State and City governments suffering from the shortfall.

In June of 2001, the Unemployment trust fund held a total of $91.6 billion in bogus bonds. It now holds $49.3 billion. In the last two years, and due to a sour economy, the American taxpayer has been double taxed $42.3 billion for taxes employers paid previously but the government stole. Either that or it was put on the national debt credit card for our children to pay later. The national debt has gone up $638 billion since the beginning of fiscal 2002.

Airports & Airways

During March, travelers paid $633 million in airport and airline taxes, but travel was down due to the war in Iraq, hostility towards American tourists, and business lost after September 11, 2001.

Outlays necessary for general airport maintenance, new security people and equipment, and so forth, cost the Department of Transportation $2.7 billion during March.

As a result, taxpayers were hit for $2 billion in taxes that had previously been paid by travelers but stolen by the government to spend elsewhere.

The one value present in these bogus bonds and trusts is that they allow the government to withdraw money from the Treasury's general fund without new legislation.

Federal Employee Retirement

This is the second largest account, second only to Social Security. The Federal Employees Retirement trust currently holds $588.8 billion in bogus bonds.

During March, federal employees put in another $1.6 billion, but Outlays were $4.3 billion.

This means that you, the taxpayer, helped make up the $2.66 billion shortfall with your individual income and corporate taxes that should have gone for other goods and services. And yes, the government misappropriates money from its own employees.

Do you think the federal employees care as long as they've got you guaranteeing their retirement money?

Social Security

No draw down here, thank God. The Social Security trust fund is the combination of the Federal Old Age & Survivors Insurance and the Federal Disability Insurance trust funds. Currently, it holds $1.4 trillion in bogus bonds and accounts for 21.7 percent of the national debt all by itself.

Pay particular attention to the Outlays for Social Security. What do you suppose it's going to be like if and when the Social Security Administration, housed in Baltimore, must turn to its trust fund?

Also notice that surpluses are not gone as some democrats would like you to believe. Social Security is the government's largest slush fund. In fiscal 2002, it produced an $89 billion surplus despite high unemployment; i.e., fewer workers contributing.

In fiscal 2002, all entitlements together including Social Security produced a $149 billion surplus for the government to enjoy.

These surpluses are planned into annual budgets as "off budget" revenue.

Here's Table 9 that appears on the same page of the Treasury's Monthly Report:

On the same day that the Treasury published its Monthly Report, the Washington Post came out with a short article titled "US: $58 Billion Shortfall in March." In Table 9, you will notice that the total "Net Receipts" from the total "Net Outlays" (column one) is exactly $58.7 billion short in terms of budget spending. This also represents programs that must be cut until the government can borrow the money to make it up.

The Washington Post article goes on to say; "Halfway through the 2003 budget year and ahead of April's annual flood of income tax receipts, the government's balance sheet was in the red by $252.65 billion, compared to a deficit of $131.92 billion in the same period in the prior budget year" (Do the same with columns two and three).

The important thing to grasp here is that the "annual flood of income tax receipts" expected in April does not look very good.

Take a look at "individual" and "corporate" income taxes carried across "Fiscal Year To Date" and compared to "Comparable Period Prior Fiscal Year" (2002).

Individual income taxes are down $27.1 billion compared to fiscal 2002 and Corporation income taxes are down $33.8 billion for a combined total of $60.8 billion less than last year.

And last year's April "windfall bonus" was a disaster for the government:

In other words, indications are that this year's April tax receipts are going to be even worse than last year's. Not only do we have more unemployment and workers who have taken jobs paying less, but there are some people who are refusing to pay their income taxes in protest of the war in Iraq. In some way, I sympathize with these protesters since the government asks us to "support our troops" and then cuts veteran's benefits.

The bigger question is—what sort of budget planning is it that sees a declining economy with shortfalls in its own revenue, and then goes ahead planning even greater spending? When does the government tighten its own belt? Some day it has to bite the bullet.

Here's a recent table from the Office of Management and Budgets (OMB), the President's budget planning office:

Wow, look at that. The OMB actually anticipated a shortfall of $17 billion in the fiscal 2003 budget receipts. Isn't that thoughtful?

We just saw that the month of March alone produced a $58.7 billion shortfall and we are off $252.6 billion in the first six months of the fiscal year. Plus, by their own accounting, last year produced a $158 billion deficit while the national debt went up $421 billion (the real deficit).

If a $158 billion deficit gave us an increase of $421 billion to the national debt, what can we expect from an anticipated $304 billion deficit—$800 billion or a trillion once the debt ceiling is busted? We're on our way "To The Moon, Alice."

As far as I'm concerned, you can take all of these projections and dump them, including the "Golden Dame's Production" or GDP.

But pay particular attention to the inclusion of the ever rising "Debt held by the public." Where is the rest of the national debt? Where is the part held by entitlements under the phony label "Intragovernmental Holdings?" Why doesn't it appear in this table? (Also see: Trust Fund List)

By its exclusion, is the OMB acknowledging the fraudulent meaninglessness of these entitlement trust funds?

And don't forget, these estimates include "off budget" receipts from entitlements like Social Security as part of their revenue in budget planning. Last year, $149 billion from entitlements, $89 billion from Social Security alone, was included in the budget as though it was their own money to do with as they please. If the theft is in the budget, it can't be counted as part of being "over budget" or having a deficit even though it raises the national debt.

And don't go playing politics with this issue, thinking that one party is better or worse than the other. That's a distraction leading away from the main issue. Both republicans and democrats are equally guilty of the Pay-It-Again Sam scam. Our only chance is to get rid of them all, take over the Treasury, or stop giving them surpluses.