..........Last week, we had the new Speaker of the House, Dennis Hastert (R-Illinois), talking about finishing the 2000 budget, another thing they do not seem capable of doing even though they've had House and Senate Budget, Finance and other committees working on it for more than a year. Here's what Mr. Hastert said:

.........."When I first became speaker, it was the consensus of our conference that we not dip into the Social Security Trust Fund. The good news: We had a surplus in Social Security. Bad news: We had a surplus...Certainly, if we were just going to dip into the Social Security Trust Fund like every other Congress, we would have gotten our appropriations done a long time ago...The way to control the message is to say, 'Mr. President, you insist on breaking into the Social Security Trust Fund. We don't want to do that, but if you insist, that may have to happen'."

..........Sounds like we need to have Alan Greenspan drop in on Congress to teach members how a general fund works and what federal trust funds are all about, provided he can tell them in language they will understand.

..........No federal trust fund has ever held any cash. So, what's to "dip into"?

..........With some stretch of the imagination, you might say that dipping into a trust fund is when the Treasury redeems some of the nonmarketable future tax bonds that every trust fund holds. In that case, the last time anyone "dipped into" the Social Security Trust Fund was in 1982. At that time, the Social Security Administration had not collected enough money to meets its obligations to the retired and disabled. What's more, it was necessary to do this several years in a row just before that. If you will remember, these were times of gas lines, high inflation, high interest rates, and serious unemployment. The latter causing a reduction in FICA contributions. Didn't Rockford, Illinois lead the nation with about 23 percent unemployment at the time? Where was Mr. Hastert? Does going back to 1982 sound like "every other Congress" preceding Mr. Hastert's?

..........If the Speaker is at all surprised by a Social Security "surplus" this year, then he should take a close look at the following chart. Since 1983 and the Greenspan Commission, Social Security has always taken in an enormous excess or profit. Too bad that money was all stolen instead of working for beneficiaries.

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..........The U.S. Treasury, which operates on the general fund system, holds all cash. It may play some games with the Federal Reserve, but there are no other accounts with any real money in them. That's the nature of a general fund system--no other cash accounts. It's the nation's bank. All cash stays there until it's spent. That's where all of your FICA payments go, and that's were they stay until spent. At the end of the fiscal year, the general account is brought to a "zero" balance.

..........The Social Security Administration, the most efficient organization in Washington, tells the Treasury exactly who and how much to pay each and every retired or disabled recipient every month. The excess, money over and above what it takes to do this and currently running at more than $6 billion per month, stays in the general fund until Congress spends it. And Congress always spends it. They spend it every month of every year, and they do it with every other entitlement taking in an excess or what Mr. Hastert and others call "a surplus".

..........According to Peter Hollenbock, one of the public information officers for the U.S. Treasury, certificates of indebtedness are issued monthly to the Social Security Trust Fund to account for this $6 billion excess. Then, towards the end of the fiscal year, these certificates are "rolled over" into nonmarketable bonds. Isn't that nice of them?

FUTURE TAX BONDS

..........Nonmarketable Treasury securities are nothing more than future tax payments for the public. Just like any bond, note, bill or savings bond sold on the open market, these nonmarketable bonds are backed only by "the full faith and credit of the United States" which means you, the taxpayer. Don't let the words fool you.

..........Your government, the people you elected to office, your representatives who are supposed to be working for your general good, are instead pretending or deluded into leading you to believe that there are "real" funds in trust accounts, real money. They want you to believe that, when Social Security needs to draw on its trust fund, cash will be there. When Social Security requires its vast resources, profits that have already been stolen and spent, the trust fund will come through for you or work like the normal savings account with which you're familiar. When, in 2012 or thereabouts, Social Security needs more income to meet its obligations, not because of baby-boomers but more likely because of increasing age of survival, a proportionately diminishing workforce with less purchasing power and other factors---the trust fund can sustain things until 2034 or beyond. Nonmarketable bonds to the rescue. Hooray!

..........Nothing could be further from the truth. These are flat out lies that you've been hearing for at least the last two years, ever since Clinton said "we must fix the roof while the sun is shining."

..........There is no place to get the real money to redeem these promissory notes without raiding the general fund tax base which means either of two things. First, the government will have to raise income and other taxes considerably. Or, second, you will have to do without other items in "discretionary" spending such as agriculture, education, defense, health or whatever. There is no other choice. Not unless we go back to the days of kings and pirates to raid other countries for their treasures---a trick that would not work so well, since we went off the gold standard and would have to sell any booty to somebody else.

..........Here's the way the government explains the above. The Congressional Research Service (CRS) has issued a report titled "Federal Trust Funds: How Many, How Big, and What Are They For?" In the "Summary" section of that report, page one, paragraph four, line six, we find the statement: "The trust fund balances tell the Treasury Department whether or not it has legal 'authority' to keep issuing checks for each program." This is the government's way of saying that the cash comes out of the general fund. It means nothing more than that actual cash payment, when needed or when nonmarketable bonds are metaphorically cashed-in, will come from the Treasury's general fund of tax receipts for that year. You will do without something else you should have had that year or you will have paid one helluva lot more income tax.

..........Topping it all off, is the bald-face fact that this amounts to double taxation. The very same people who contributed excess payments in the first place, their children or grandchildren, are now expected to pay it again, with interest. You are required to pay a second time because Congress stole your retirement money, spent it wherever they damned well pleased, and left promissory notes in a trust fund. Promissory notes that only you, the beneficiary and original payee, must now buy back.

..........We would all be better off if the government had never put anything in trust, if nonmarketable future tax bonds simply disappeared, if they had simply stolen the money and admitted it right off-the-bat. Don't you think it's a little late for them to be confessing to the first part of this offense now, to be confessing all over the place and promising to stop, while they don't even mention or perhaps recognize the much more serious crime of double taxation?

..........Already in gridlock over a budget that they should have finalized months ago, these crooks are finally starting to see the smallest ramifications of their nonpartisan criminal activity. With "discretionary" spending becoming a smaller and smaller part of their budget considerations, while entitlement holdings have risen to 34 percent of the national debt and interest payments against this debt are over $1 billion per day, the choices of where to spend the little that's left become harder and harder to make. And like farting in the elevator, they want to convince you that the other guy did it.

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