Almost unnoticed amidst the political posturing and dogfighting over America's debt limit and fears of national default, President Barack Obama made a stunning statement that reveals a blinding truth that all America needs to hear and understand:
President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
"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," Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News. [emphasis added]
This is a fascinating turn of events. Every time the Republicans attempt to reform Social Security or Medicare, the Democrats thunder that those programs have billions of dollars in the bank so there's no need to steal food from the mouths of the elderly. Even the Social Security Administration says so: its most recent report claims nearly $2.5 trillion of assets.
The report also explains that the long-term outlook for Social Security is unsustainable; as the baby boomers retire, they'll stop putting in and start taking out. The trust fund will be gone in a few decades with no end of red ink in sight after that. That's a problem down the road; it certainly isn't going to happen August 3 of this year.
If we've got that much money in the bank, why are we worrying about borrowing more? Because the lockbox, or trust fund, is a lie: the money is not in the bank. All that's in that lockbox is government IOUs: the government loaned the money from its left pocket to its right, and spent it.
That's all there ever was in the lockbox. Social Security has been a lie and a financial fraud since Day One. If any private sector organization did that, there'd be orange jumpsuits for everybody.
Being government, it's all legal, but that doesn't make it wise, nor change the underlying reality of where the money is and is not. Obama is completely correct to note that the Social Security trust fund has value only insofar as the government pays its bills from general revenue; if the government goes bust, the IOUs are worthless and so is the trust fund.
Of course, Obama being Obama, he can't tell even a transcendent truth without cloaking it in a lie. There is absolutely no cash in any Social Security coffer to pay anybody anything; in saying so, Obama is abandoning the lies of 75 years of Democrats. We applaud this; welcome to reality, Mr. President!
Alas, it's totally false that the debt ceiling has anything to do with our ability to issue Social Security checks. Even though our debts are massive, the government is collecting billions in tax revenues as James Pethokoukis of Reuters explains with a lovely graph and article.
We have plenty of cash coming in to pay Social Security checks.
We have plenty of cash coming into pay the interest on our national debt, and to avoid any kind of default to anybody.
We have plenty of cash coming in to pay our soldiers and to buy them bullets.
What we haven't is enough money to do all this and also pay for Mr. Obama's union looting, bureaucratic featherbedding, governmental overreaches, and the whole panoply of wastage that has been endemic to Washington DC since long before his administration. If the debt ceiling is not raised, Mr. Obama as President will have to make some hard calls. He'll have to decide whether to pay what's important or whether to take care of his shady friends instead.
This has nothing whatsoever to do with Congress because they've failed to pass a budget for several years now. It doesn't have anything to do with Republicans in the House either; the House passed a funded, somewhat balanced budget several months back.
The Democratic Senate chose not to pass it, and Obama said he'd veto it if they did. Those decisions are the responsibility of Democrats no matter how much they try to blame Republicans for urging our drunken government to go sober.
Any default or starving grandmothers will be the fault of Mr. Obama and his minions who willfully choose not to pay the debts due and choose instead to spend tax revenues on their friends. Nobody in America should welcome this outcome, but we all need to clearly understand where the fault will lie.
The Republican Congress needs to immediately pass, for the second time, the Full Faith and Credit Act which requires Obama to first pay debt interest and Social Security before everything else, just to make clear who's to blame when the Senate Democrats again won't pass it or Mr. Obama vetoes it.
When anyone talks about our unsustainable promises, how many times have we heard some oldster say, "I paid my money in, I ought to get what's coming to me?" So he ought, but as conservatives have been saying for decades, the money simply isn't there. It's all been stolen. It isn't there. There's nothing there but some crummy IOUs.
We should all be grateful to Barack Obama for finally dispatching the myth of the "Social Security lockbox." There is no money there; there never was. Trusting the government to take care of you in your dotage is idiotic in the extreme.
Those who are already elderly and retired have our sympathy. For anyone still working... there's just no excuse not to make your own arrangements for the future, viewing government as your enemy and not your friend.