A Drip of Truth Leaks Out

One of the sad side-effects of our mainstream media's liberal bias is how easily Democrats get away with lying.  When no atomic weapons were found in Iraq, for example, all the big-name Democrats who had warned that Iraq had such weapons suddenly started saying, "Bush lied, thousands died."

Bill Clinton had worried publicly about Iraqi weapons while he was President and Democrats such as Al Gore and John Kerry had agreed with him.  That didn't matter when the weapons turned out to be mostly missing - the media promoted the message that Iraq was a wholly Republican mistake, which has now become received wisdom unchallengeable even by the strongest actual facts.

There Is No Social Security Trust Fund

Journalists have supported other liberal lies just as ardently for many years, but the largest, most spectacular and oldest such lie we can think of is the lie about Social Security.

Back when it was put in place, President Roosevelt insisted that it be called an insurance system and that the bureaucracy set up individual Social Security accounts.  When one of his aides pointed out that Social Security was just welfare and asked why they should do all that meaningless bookkeeping, he replied, "Because if people think it's insurance, Republicans won't be able to kill the program."

Democrats have ridden that lie ever since.  Whenever Republicans point out that Social Security is unsustainable as currently defined, Democrats criticize them for wanting to raid the Social Security "trust funds."

Mr. Obama recently did the American people a favor and pointed out that Social Security is not a sacred pool of money that's been set aside.  He warned that if he couldn't borrow any more money, he might not be able to send out social security checks.  The money that should be in the trust fund is in fact gone because our politicians spent it on other things.

One of our commenters cited this Wall Street Journal amplification of Mr. Obama's truthful statement that Social Security funds are in no way separate from other government funds:

... meeting Social Security obligations in August, September and all future months in this fashion would add nothing to the gross government debt subject to the debt limit. Not, at least, until the $2.4 trillion Trust Fund is exhausted in 2038.

If issuing Social Security checks does nothing to immediately affect the debt limit, how is it possible that Social Security would be at the top of the expenditure cut list?

The reason is simple and stems from the constitutional question that arose from a federal program in which all citizens were required to participate. In Helvering v. Davis (1937), the Supreme Court upheld Social Security's constitutionality because "The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way."

As a result, the federal government can apply the revenues collected from Social Security payroll taxes, and the income taxes collected on benefits collected from higher-income individuals, to any government liability.

Our reader went on to say:

Now we find out the biggest lie of them all! People said, "I paid in, I'm entitled to my social security." Way back in 1937, the Supreme Court ruled that what people paid in SS taxes is "not earmarked in any way." So they can spend it on anything they like.

It's NOT insurance, it's just another tax. That's the monster lie!

Not only can they spend the money, they already have!  It's all gone, which is why Mr. Obama has the ability to choose not to send out Social Security checks.

The Journal and Mr. Obama are correct in saying that Social Security funds are in no way separate from any other government money, just as the Court ruled in 1937.  In order to maintain the fiction, however, the government used to claim that the Social Security "fund" was kept in a separate account.

When LBJ launched the Great Society, however, the Democrats decided to tell the truth for once and stopped keeping Social Security in a separate account.  Rolling the fictional trust fund into the debt account made the debts being run up by the Great Society look better.

What the Journal pointed out is very old news.  Back in 2003, an economist named Lew Rockwell described a 1959 court ruling which pointed out that the government had been lying about Social Security all along:

The OASI [Old-Age and Survivors Insurance] program is in no sense a federally-administered 'insurance program' under which each worker pays premiums over the years and acquires at retirement an indefeasible right to receive for life a fixed monthly benefit, irrespective of the conditions which Congress has chosen to impose from time to time.

While the Act uses the term 'insurance,' the true nature of the program is to be determined from its actual incidents.

The law calls it "insurance," but the Court said that we know it's not really insurance by what it does.  There is no Social Security Trust Fund, it's not an investment scheme.  The dollars you paid in have mostly gone to pay pensions of the people who got in before you did, just like any Ponzi scheme.  If a real insurance company did that, there'd be orange jump suits for everybody.

Some people know the truth. The AARP lavishes campaign contributions on politicians because their leaders know that Social Security funds are not set aside and that it's just a welfare program.  They know it, but they don't tell their members.

Now that Mr. Obama has admitted the Social Security fraud, maybe the mainstream media will comment on the lie behind his truth, but we doubt it - that lie is too convenient for Democrats.  Only a man supremely confident in the media's loyalty would have dared reveal one of his party's fundamental falsehoods as an ephemeral negotiating tactic.

Tax the Rich

Another liberal mantra is that all our financial problems would be solved if only the rich would pay their "fair share" of taxes.  It hasn't done any good to point out that the rich already pay most of the taxes the government gets.  It hasn't helped to point out how many people don't pay taxes at all.

Finally, USA Today published an editorial "Myths and misinformation mar debt-ceiling battle."  True to form, they didn't actually accuse any of the Democrats who've been spouting these myths of lying, but they did list "All we have to do is tax the rich" as one of the myths:

In his speech Monday night, the president again played the class warfare card, railing against tax loopholes for corporate jets and hedge fund managers. Those loopholes deserve to be closed, and they represent the absurd extreme of the Republicans' anti-tax pledges. But the tax loopholes represent a minuscule part of the debt problem. Ending them would raise about $18 billion over 10 years, or 0.2% of the $9.5 trillion in deficits projected by the Congressional Budget Office.  [emphasis added]

In other words, Mr. Obama's talking point about taxing the rich would bring in less than one percent of the money needed to cover the deficit.  USA Today didn't call Mr. Obama a liar for repeating that myth, but we will.  He lies!

Conservative Byte offers a video demonstrating that taxing the rich won't help.  The government spends so much money that confiscating all their wealth - not their income, but all their accumulated wealth and tossing them out on the street in their underwear - and also confiscating the entire assets of all the big companies such as Wal-Mart, GM, and GE, would run the Federal government for less than a year.  Of course, at the end of that year you'd have nobody left to tax ever again.

Taxes are not the problem.  Tax revenues have dropped with the recession, but this isn't the problem either.  Tax rates have gone up and down, but as economist Arthur Laffer showed, you can't raise the tax rates much higher than we have them now or people will hide their money and you'll get less actual cash in the door.

No, the problem is government spending pure and simple.  The Bipartisan Policy Center has documented some of the options for cutting spending.  Everybody who's involved knows that cuts are the only solution, but nobody will admit it.

Remember the old saying, "How can you tell when a politician is lying?  When his lips are moving."  The truth is out there, but you have to look for it.