This month, December, 2006, the federal government will dump at least $78.3 billion in interest into the Intragovernmental Holdings side of the national debt. Sixty billion will be added to Social Security and Medicare’s debit accounts that are still producing surpluses in payroll taxes that also end up as debt.

The same thing will happen in June of the 2007 calendar year because this month’s addition is only half of the annual interest due these debit accounts against their fiscal 2006 closing balance of $335 billion for Medicare and almost $2 trillion for Social Security.

Most ludicrous of all, is the fact that this interest doesn’t cost the federal government one red cent. It’s just an electronic entry and the measly printing cost of sending more paper bonds to Parkersburg, West Virginia, the home of the Treasury’s Bureau of Public Debt, so some secretary can stuff them in a filing cabinet to backup the computers Congress doesn’t trust. And Social Security’s debt is the only one, of the 141 such accounts, that’s backed up in this manner.

But don’t get the idea that these entries are “worthless” or “fictional” as some of the fraud supporters would like you to believe, even President Bush who waved a handful of them in the air calling them “meaningless” in a last ditch attempt to save his personal accounts folly.

In fiscal 2006, that closed last September thirtieth, the Disability Insurance portion of Social Security’s so-called “trust fund” already “cashed-in” $5.2 billion of these bogus bonds and has withdrawn another $2.2 billion in the first two months of fiscal 2007. You paid for it because the money came out of the general fund of taxpayer dollars on hand or money borrowed. And this wasn’t supposed to happen to Social Security until the “baby boomers” begin to take early retirement in two years. For this, you can thank the job market and the “disability advocates” advertising daily on television.

All of this is happening while Henry Paulson and Bernard Bernanke are today (December 14th) in China on their knees begging and cajoling the world’s most prosperous economy not to “come off” the dollar and to continue loaning us money.

I suspect that they are also going to visit Japan because the Japanese hold even more in our “treasuries,” have much deeper roots in our economy and what was once American property or business, and have also openly stated their intentions to come off the dollar and invest elsewhere. But the loyal media is hyping the trip as an attempt to make China revalue the yuan and stop making “knock offs” from our supposedly patent protected products.

At the same time, if you bother to look at the Treasury’s Bureau of Public Debt web page on “Who Holds The Debt” you will notice that as of December 12, 2006, (the latest report as of the date of this article) we have already borrowed an additional $38 billion from investors so far this month.

Mr. Paulson better get his butt back here and pay off some of this before we set another record monthly increase to the national debt. Because of the tremendous amount of “interest” dumped into accounts in December, the Treasurer usually does everything he can to curtail real borrowing, at least until we’re into the new calendar year.

To top it all off, CNN’s Lou Dobbs tells us that Congress has just sold the Pennsylvania Turnpike to some foreign country. Add that to the Indiana Toll Road we've also sold and you should be able to see how desperate our government is for money. But don’t worry, AIG, the insurer of insurance companies that has also started to compete with their customers, is buying management of our ports from the company in Dubai. The British who once held the management of these facilities was allowed to sell this business. We're lucky it wasn't purchased by the al Qaeda. Maybe AARP will buy the security of our borders.

In summary

If you examine the compounding interest in the fraudulent Social Security trust fund scam, you can’t help but notice that the interest alone is enough to support the supplemental retirement insurance program further and further into the future and probably in perpetuity.

In other words, the scam could theoretically continue forever, even if the Beltway Bandits stopped stealing the surplus or cut payroll taxes to break-even.

Once again, I’m going to give you the words of Thomas R. Saving, one of the trustees for the Social Security trust fund and professor of economics at Texas A&M University while serving on President Bush’s commission to reform Social Security. This time, I’m not going to paraphrase him or take snatches of his comments. You can read the entire statement he made in 2001.

"The Social Security trust fund does not provide the resources to close this financial gap. The non-negotiable bonds in the trust fund are essentially i.o.u.'s from the government to itself and must ultimately be repaid by taxpayers...Another targeted misrepresentation is that the Social Security Trust Fund can maintain the system from 2016 to 2038, pushing the need to do something well beyond most people's time horizons. The reason is that the trust fund consists of nothing but U.S. Treasury securities, i.e, federal government IOUs. But how will the Treasury redeem those IOUs when they come due? A 2000 Congressional Budget Office report said, 'To repay what [The Treasury] has borrowed from the trust fund, the federal government must raise the cash by boosting taxes, reducing other spending, borrowing more from the public, or retiring less debt,' making the trust funds essentially just a commitment to massive future tax increases."

Here’s what he said at the first meeting of the commission:

 “Mr. Chairman, I think an issue that’s related to this issue is that if we, and we could do this, Congress could simply do this by running the printing press and printing up more of these bonds, if there was a googol trillion dollars in the trust fund, and that’s 10 to the 100 trillion in the trust fund; or if there’s zero, the implication for the federal budget are identical after 2016. It makes absolutely no difference what’s in the trust fund, and because of this, we would argue in economics there’s nothing in the trust fund, it’s simply a promise, and as it impinges, as I pointed out earlier, both with Medicare, Medicaid and this, by 2070 one hundred percent of the federal budget will be used for these programs. And that’s assuming the federal budget grows with gross domestic product and stays a fifth of the GDP. The point is that the trust fund is irrelevant except in this legal sense, that when the trustees come to the Secretary of Treasury and hand them these certificates, they are required to give us cash and that’s only required if Congress requires them to do that, and if it’s impinging on the other aspects of the federal budget that are more important at the time, then clearly hard decisions have to be made. But it doesn’t change the actual federal revenues in any way. So it impinges on these revenues, and it’s important for I think the public to understand what the trust fund really means and changing those numbers, because they can easily be changed and the system can be made solvent in that sense of the word. We can make that trust fund anything we want to. If we want to change the interest payments, which is a suggestion that’s been made, change the rate of interest, make it 100 percent a year, we can make this last forever, but we can never actually find the real resources because retired people, as I say, drive real cars, eat real food, and live in real apartments and use real medical care, and that’s real output in the country and that’s the only thing we have. We can’t change it with writing numbers on a sheet of paper.”

If you want more confessions from other authorities, click here.