Treasury Secretary Paul O'Neill may have burst the bubble when he started telling the truth. When, during speeches and on national TV talk shows, he said that there is no money in the Social Security Trust Fund. When the Secretary of the Treasury tells you that there's no money in one of the accounts he manages, you better believe it.

It's the same thing Clinton said in the Analytical Perspectives section of his 2000 budget proposal. It's the same thing that has been echoed by people like Robert Reischauer, former director of the Congressional Budget Office (CBO) and Mitch Daniels, Director of the Office of Management and Budget (GAO). But nobody said it in plain English and out in the open before O'Neill. Instead, it was usually couched in language about bookkeeping or in obscure documents few in the private sector read.

Then, just a few days ago, the President's commission to study Social Security came out with an interim report saying that we've got a problem anytime Social Security has to turn to its trust fund for money. Describing non-asset securities in the trust fund as different from bonds sold on the open market.

Non-asset securities? Sounds like an oxymoron doesn't it? Well, thanks to our government it's not. What's in the Social Security Trust Fund is debt, obligation, a negative, a big minus sign. In fact, the Social Security Trust Fund now accounts for more than 18 percent of the national debt. How do you explain that when the entire national debt is a huge negative?

Critics, particularly the democrats, are coming out with guns blazing. Politicians see their primary slush fund in trouble and are portraying the commission or anyone who threatens their major slush fund as a bunch of kooks, irrational, irresponsible, and subversive people. Like cornered rats, the tax and spend party of the people and its supporters are lashing out in all directions with any off-the-wall argument they can dream up. Paul Krugman of the New York Times even dragged out the old GDP standby to re-enforce his diatribe. see: Krugman article

You've got to forgive the news people because this all means that they've been sleeping through their watchdog responsibilities for at least ten years. Now they don't know which way to turn, how to recoup or justify all their previous opinions. There's little worse than being exposed as incompetant. It can ruin your day.

But how do you forgive the democrats? The party that represents the people who pay most of this working man's tax, pay more in payroll than income tax, and the vast majorities who depend on Social Security as their only form of retirement. If anything, the democrats should be picketing Congress and the Administration demanding that government stop stealing their people's Social Security and Medicare money. They should be outraged by the injustices a republican Treasurer is pointing out and storming the Bastille. Instead, they're complaining about losing their pork barrel money. Funds that they think belong to them to do with as they please.

What the democrats are doing is sort of like stealing money from your kid's piggy bank, leaving a note behind. A note that says he or she must replace the money, with interest. And then complaining because the kid hasn't filled it back up again.

We're talking about money. Cash, moola, dough, scratch, gidas, currency, or what the Federal Reserve describes as type "A" money which includes checks and bank transfers. What Alan Greenspeak refers to as liquidity or fluidity. The sweat equity of every worker. The medium of exchange. We all know what money is, and it's not a complicated subject. It's what can be used in trade for goods and services. You've either got it or you don't. Put up or shut up. There's no great debate about any subtleties when you look in the vault to see what's there. You can't argue about what you find. You can count it and debate the count, but that's about it.

What's in the Social Security Trust Fund, or any entitlement trust fund for that matter, are nonmarketable Treasury securities. Bonds that were placed there when Congress and the Administration took surplus money from payroll taxes and spent that money wherever they pleased. Let's not get sidetracked by "the law" that politicians and bureaucrats claim requires them to do this. The fact is that the money is gone, spent, never to be seen again.

Undertand this once and for all. Memorize it. No one, absolutely no one but the American taxpayer pays off U.S. Treasury securities—all of them, marketable and nonmarketable alike. "Backed by the full faith and credit of the United States" means nothing more than backed by every man, woman, and child in the country—anyone who will ever pay taxes. That's the only thing making Treasury securities the "world's safest investment."

The trust fund bonds left behind are exactly the same as Treasury securities sold on the open market on one important point, and different on everything else. The point of similarity is that they can only be redeemed by American taxpayers. And these are the same American workers who paid the surplus in the first place. The same people who gave the government real cash in excess payroll taxes and will someday be required to buy back their own money, with interest.

That's double taxation plain and simple. It's what the commission warns will happen when and if Social Security must ever turn to its trust fund, a date that is currently set at 2016 or thereabouts. It's why the commission says that the system is broken, an inept way to describe what's really happening but they either don't know any better way to say it or they're trying to give you the news gently.

In reality, it's the greatest hoax, the greatest system of fraud and extortion, any government has ever pulled on its own citizens. Worse than anything Charles Ponzi ever imagined.

What makes "special obligation" nonmarketable bonds different from the many types of Treasury securities sold on the open market are several factors. First, they cannot be traded. By definition, they are nonmarketable. In this sense, they are like U.S. Savings Bonds that cannot be cashed-in before maturity without penalty or by anyone other than the designee, the name on the bond.

More importantly, no one walked in with their eyes wide open and contracted to loan the government money in return for a profit. No one said here, I'll loan you money if you pay me the annual interest stated and pay off the loan in full on such and such a date. This never happened with the nonmarketable bonds in entitlement black hole accounts.

What did happen was that Congress and the Administration simply handed the trust fund nonmarketable Treasury securities in exchange for the cash they had already stolen. To top it off, they then pay annual interest by simply handing the trust fund more of these bonds, no cash involved.

What's more, the interest paid entitlement trust funds is always higher than the annual interest paid legitimate securities. More debt. Ask the Treasury people. They will tell you that monthly the Treasury issues entitlement trust funds "certificates of obligation" and periodically these are rolled over into nonmarketable bonds. Interest is figured with a five year model of what was paid legitimate long term (30 year) securities. For instance, last year long term bonds were paid an average 6.489 percent interest while the trust fund bonds were paid 6.666 percent, the mark of the beast.

American workers would be better off if they threw their surplus payroll taxes in the ocean, giving the money to other bottom feeders. That way, they would not be in additional debt. They would not be left with more promissory notes or markers that they or their children must pay off in the future, plus interest.

If you doubt this, all you have to do is look at the Monthly Statements from the Treasury's Bureau of Public Debt. There, you will find that the national debt is still going up, not down, and you will find that the Social Security Trust Fund now (as of June 30, 2001) holds more than 18 percent of the total national debt and stands at $1.115 trillion. It will rise to $3.5 trillion in the next ten years. Interest alone will total more than $60 billion this year, 2001. More debt.

Remember that the Social Security Trust Fund is composed of the Federal Old Age & Survivors fund and the Disability fund. Add them together.

If stolen Social Security surpluses had been invested anywhere else, anywhere real, not just the stock market but in real estate or by making loans directly to corporations and other nations, we would now be at least $1.115 trillion ahead of the game. We might have that much in a real trust fund like the government's own Thrift Savings Account for federal employees. One of the 15 real trust funds managed by the government, currently standing at $34 billion in positive assets, and investing in the Standard & Poors Index of the New York Stock Exchange through Barclay Bank of Great Britain.

And the main reason the government has made the securities they hand entitlement trust funds "nonmarketable" is to emphatically separate them from other securities sold on the open market, what goes by the name "the bond market" and is reported daily in news. If investors in the bond market ever felt that securities similar to their contracts were passed out like candy from Santa Claus, the bond market would crash.

If you doubt that the government misuses these bonds, take another look at the list of some 160 trust funds in the Monthly Statement. There, you will find that less than two dozen entitlement trusts have about 90 percent of the holdings while 10 percent goes mostly to perks for judges, departments, and federal employees. Just name a trust fund, put some nonmarketable bonds in it, and voila, you've got a gift account or insurance account to draw on whenever necessary. Of course, the draw is from the Treasury's General Fund of tax money, all your money. Isn't that nice?