Obama's Impeachable Social Security Threat

For the past two weeks President Obama's veiled threat to withhold social security checks on August 3 has influenced the debt ceiling debate. On July 12 CBS quoted the President as saying, "I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it." In fact, there are many alternatives to withholding Social Security such as furloughing employees in non-essential bureaucracies, such as the Departments of Labor, Education and Energy. Obama's use of Social Security for partisan purposes is fraudulent.

Social Security involved fraud from day one. In the 1930s, in order to convince Americans to accept it, the Democrats made two mutually contradictory claims, expressed by Professor J. Douglas Brown of  Princeton University.  The first claim was that Social Security is an insurance plan, secured through a trust fund, that will return a fair benefit to participants.  The second claim was that Social Security was a welfare benefit that subsidizes lower-wage Americans.  It did this by using a formula that provided proportionately higher benefits to the lowest salary levels.  It established pay bands, and the highest percentages were paid to the lowest salary bands.  Unless participants took the time to review the benefit structure, they could be easily defrauded into believing that Social Security was not a welfare plan but rather an insurance plan.  Fraud was the Democrats' marketing strategy.


The public was told that there is a trust fund. In fact, Social Security was designed as a pay-as-you-go plan, essentially a pyramid scheme that depended on consistent demographic growth.  But there was a depression followed by a baby boom that was followed by a baby bust.  Rather than hold good on its claim that there was a trust fund, Congress proceeded to steal the funds in the Social Security trust and used them for other purposes, chiefly to win votes.  Moreover, despite the lack of actuarial soundness, Congress raised benefits in the 1970s but could not fund the increased benefits.  Then, it decreased benefits in 1983 for people in their twenties and younger who were scrambling to make ends meet in a permanently declining and increasingly socialist economy.

In other words, Social Security was a fraud from day one; Congress has acted in ways that would put private sector benefit sponsors into prison; indeed, it has stolen the already insufficient funds about which it has consistently lied to the public.


Now President Obama commits an additional fraud.  Having scammed the American public into establishing a fraudulent program, having lied about the program's nature, having promised benefits it could not pay, having stolen the money that was put into the fund, Obama now threatens to openly breach the most elementary standard of fiduciary and moral duty to trust beneficiaries. He aims to use the fund as a partisan football.   If Obama were a private pension fund manager even threatening to use pension money for purposes other than designated by the trust would be a breach of fiduciary duty.

Obama's threat to use Social Security as a partisan football is a criminal act and an impeachable one.

Obama Displays Poor Leadership in Threatening Social Security Payments

I received this e-mail from Jay Sekulow, chief counsel of the American Center for Law and Justice.  President Obama displays a shocking lack of leadership and irresponsibility in using social security, which should be secured with a designated trust, as a loaded partisan pistol. 

President Obama could not be more clear, saying in his television address: “If … we default, we would not have enough money to pay all of our bills — bills that include monthly Social Security checks [and] veterans’ benefits ….”

This is not only a moral outrage; it’s just not true.

Our legal analysis has concluded that there is nothing in the Constitution or federal law that would prevent the President from ensuring that seniors and our military heroes get the benefits they are due.

If President Obama will not make it a priority to honor our commitments to those who have paid into the system their whole lives and those who have put their lives on the line for their country, we must urge Congress to take action.  Please sign our Petition to Protect Seniors and Our Troops.

Reports have shown that if we default, not only would there be money enough to pay Social Security, Medicare, active duty military pay, and veterans’ affairs programs, there would still be $39 billion remaining each month for other essential services.

Let me be clear.  President Obama has both the legal authority and the financial resources to ensure that our seniors and our military heroes receive the benefits they are owed, yet he continues to use scare tactics, threatening those we cherish and respect.

As our nation is faced with this impending debt crisis, our leaders in Washington still have an opportunity to cut the debt and prioritize our spending.  We could save billions of dollars just by cutting funding for Planned Parenthood and the abortion industry, the terrorist-led Palestinian Authority and other despotic governments that oppose us at every turn, and pro-abortion ObamaCare.

Yet, President Obama and the liberals in Congress insist that the most important cuts we could make are ending tax breaks for corporate jet owners, while abortions remain a tax-deductible medical expense.

There is still time to prioritize our spending and solve our debt crisis, but we must send a message to Congressional leaders today.  Tell Congress to support legislation that prioritizes spending, eliminates tax increases, and protects seniors and our military heroes.  Sign the Petition to Protect Seniors and Our Troops.

Thank you for standing with the ACLJ and taking action to protect our seniors, troops, veterans, and values.  This is a critical time for the direction our nation is taking, and your voice is vital in reminding Congress of America’s priorities.

Sincerely,

Jay Sekulow
ACLJ Chief Counsel

P.S. In his address to the nation, President Obama urged all Americans to “let your Member of Congress know” how you feel about the debt crisis.  It is time to do just that.  Forward this email to anyone you know who wants to cut our debt, not our seniors and military heroes benefits, and post our petition on Facebook and Twitter.

Letter to Gerald Celente

Gerald Celente just e-mailed his summer issue of Trends Research Journal. It is full of valuable information that offers an imaginative alternative to the legacy media, and I highly recommend it. In this issue Celente advocates direct democracy, a policy that would be a serious error. I respond in the following e-mail:

Thanks for your recent issue. I agree with much of it but not  with your claim that direct democracy will  end America’s economic and political decline.  Your Swiss example is intriguing, especially with respect to Switzerland’s decentralization, but direct democracy is inapplicable to America because the size, culture, community, and  incentives differ.  You note that a Swiss canton can be as small as 14,000, but the average American congressional district is  about 735,000.  Switzerland’s population is less than New York City’s.   

Today’s problems result from pathological incentives--privileged groups’ benefits from lobbying outweigh their costs.  Included in lobbying are the same groups’ control of information, their ownership of the mass media, and their influence in the education system.  Direct democracy won’t change the incentive structure that benefits special interests and inhibits the public’s ability to think rationally about events. Your own subscription fee of hundreds of dollars, which is beyond most people’s ability to pay, evidences the inability of the public to obtain good information. 

Thus, in a direct democracy special interests will continue to influence politicians; the information needed for the public to make intelligent decisions about complex issues will be bounded by bad and ideologically driven education and Wall Street-influenced media; and, added to the mix will be the gullibility of the public that is easily brought to  an emotional frenzy and lacks information not controlled by the state.  As Madison put it in the Federalist Number 10:

…a pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction. A common passion or interest will, in almost every case, be felt by a majority of the whole; a communication and concert result from the form of government itself; and there is nothing to check the inducements to sacrifice the weaker party or an obnoxious individual. Hence it is that such democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths. Theoretic politicians, who have patronized this species of government, have erroneously supposed that by reducing mankind to a perfect equality in their political rights, they would, at the same time, be perfectly equalized and assimilated in their possessions, their opinions, and their passions.

The current decline in America’s economic and political system began more than a century ago with Progressivism, which introduced the referendum and the recall as part of an overall thrust toward (a) democratization coupled with (b) the installation of expert management of the economy, including the Federal Trade Commission and the Federal Reserve Bank.  Regulation reflected the Progressive belief that experts would be free of political pressure while, in areas experts designate,  enhanced democracy would enable the public to express its interests given the structure and options that the experts delineate. The Progressive system has failed—special interests capture experts and mislead the public. The public is not capable of understanding underlying issues, even fairly simple ones like monetary policy.  Environmental issues are complex and I have not met anyone who can explain the details of, for instance, the Waxman-Markey cap and trade bill.  Are you certain that it would not have had perverse effects such as forced evictions of honest home owners?  Hence, policies that harm the average American, such as Keynesian and monetarist economic theories, can be sold through the propaganda of supposed experts that convinces even the most intelligent voters.  Orwell was right about language—freedom is easily painted as slavery and the public cannot figure it out.

Direct democracy will be subject  to greater manipulation than the current system. Rather, a reinvention of republicanism, the less obvious solution that Hamilton and Madison proposed, and a sharp Jeffersonian  limitation of government power across the board are needed. Democracy has failed. Its enhancement will be worse.  

The Downside of Mandated Sick Leave

Michael Saltsman published an excellent article about Connecticut's mandated sick leave in today's Wall Street Journal.  Connecticut, under Governor Dan Malloy (D), has mandated sick leave for all Connecticut employers. Saltsman shows why this policy will destroy jobs and harm the state's poorest workers.  The propaganda that supported the new law used statistical means and medians, making claims such as "the average employer did not find that they had to reduce employment levels." But this use of measures of central tendency reveals misunderstanding of how economies work.

All employers are different.  About 70% of Connecticut employers already gave sick leave, and 70% said in surveys that mandated sick leave would not affect them.  Rather than the average, the marginal employer, such as a bodega, which is deciding whether or not to hire a part-time, low-wage employee, had been less likely to offer sick leave. This kind of employer will reduce employment and fringe benefits, including training. It will stop hiring less-qualified employees, forcing young people into European-style permanent unemployment.

The people whom Governor Malloy and the Democrats have hurt are the poorest and most vulnerable: high school dropouts who need to develop platform skills that will enable them to function in honest jobs.  Some will now remain in permanent unemployment, dependent upon the State of Connecticut for welfare.

As well, the claim that low-margin employers will benefit from the mandate, made by the law's supporters, is nonsensical. Once again we see Progressives grinding the poor under their Gucci heels. They do so by claiming that they help the poor, when in reality they are helping crony socialists, labor unions, attorneys, and large employers, whose smaller competitors cannnot afford to offer benefits.

The states that have seen employment decline the most, have the most income inequality, and have the largest rates of exit, like New York, are the same states that have passed regulations that harm small employers at the expense of large, reducing the economy's dynamism by freezing out new and entrepreneurial firms and ideas.  It is not surprising that academics, who benefit directly from the socialist gravy train, generally support such measures.