The subject of Social Security is surrounded by misnomers. Personal accounts, private accounts, and ownership accounts presented as something new all fall in the category of deception, not by the Social Security Administration but by the politicians that supervise it. Politicians who, by the way, know practically nothing about actuarial data, statistics, and the way a good insurance firm operates.

What George W. Bush and all of the bureaucrats who are criticizing and warning us about Social Security’s “bankruptcy” know about the supplemental retirement system’s inner workings could be written on a pin head with a shovel.

Employers, who periodically submit payroll taxes, do so in one lump sum for all of their employees, but these same employers also submit an annual W-2 form that establishes a personal account for each of their employees.

How do you think it’s possible to go to the Social Security Administration’s web site and find out what each of you have coming upon retirement?

The answer is that they have access to the individual record of W-2 forms that Internal Revenue is holding. From these, they know how much money you made each year under one or more employers you worked for. Knowing the year, and how much money you made, they know how much each worker paid in payroll taxes charged that year. It’s that simple.

So what about “privatization” and all its predicted costs?

If “partial privatization” of Social Security were set up for young workers just entering the labor market and not making much money anyway were separated from the present system, that private sector firm would have to have access to the IRS data collected from each of these workers. In itself, that would be an unusual situation.

If the firm did not have access to these records, it would have to put them together on its own and that could cause an expense, but certainly not the trillions being bandied about.

The real costs of reporting these young workers individually are liable to fall on the employers, but not on the government. The costs of reporting each employee separately instead of making one bulk payment will be added into the price of their products or services, so the public will end up paying for it – not the government.

If the individual workers, holders of these private accounts, are allowed to change investment choices in midstream or at appointed times like the government’s own Thrift Savings Plan, it will add even more costs.

These are minor costs and they certainly don't add up to the one or two trillion politicians are talking about over the next decade.

Besides, the idea of allowing individual worker’s to pick their investment areas is silly. Even experts like Milton Friedman don’t tell their pension investment houses like TIA-Cref where to put their money. They let the investment professionals handle it and if these guys are any good, they average about 17 percent return on investment, sometimes much more, and it’s not all in the stock market.

What’s more, the idea that the New York Stock Exchange brokers are wetting their lips over the commissions they might make is another silly idea. What do you think a seat on the exchange costs anyway, a few million dollars, maybe as much as a billion? This would be a drop in the bucket for Social Security and with a seat they wouldn’t pay commissions to anyone.

So where are the trillions in costs?

To understand this, you have to understand that the federal government, both republican and democrats, have been ripping-off Social Security’s money for years and especially since 1983 when Daniel Patrick Moynihan and Bob Dole were responsible for raising payroll taxes far beyond what Social Security required.

As reported by the U.S. Treasury, the excess or surplus the government walked off with last year was $71 billion. The year before that it was $82 billion, and the year before that it was $89 billion. During his first year in office, fiscal 2001, the Bush Administration took $98.7 billion and spent it elsewhere. Social Security is the government’s largest slush fund and they do it by running a scam that pretends to “borrow” the money. A scam that asks you to believe the impossible – that the same money can be both spent and saved.

Don’t think that President Bush wouldn’t probably love to use these surpluses as the argument for why he could afford to set up “private accounts” while guaranteeing that the currently retired will continue to get their benefits. The extra money is certainly there.

He doesn’t dare do this, however, because it will put the spotlight on these surpluses and where they’ve been going. From there it might possibly unravel the whole scam – and Social Security is just the tip of the iceberg. Almost half of the national debt, the entire “Intragovernmental Holdings” portion of the debt, is involved in this scam. Social Security is simply the largest portion holding bogus securities in false trust funds that are useless to everyone except the government that can use them to double tax us with interest added and without legislation.

Besides all that, neither the republicans nor the democrats will give up these surpluses that they’ve been enjoying as “off budget” revenue.

What they are really telling you is that if they lose any portion of this scam they’ve been running what they will do is borrow the money legitimately from investors like China, Japan, and other organizations or individuals, or raise taxes to make up for it. That’s the real one to two trillion dollar “expense” they’re talking about.

The very last thing they would do if they lost this booty would be to cut their budgets. And what kind of an organization is it anyway that plans a $2.5 trillion budget when their income from last year was about $200 billion short of $1.9 trillion?