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Save Social Security

April 7, 2009
Real News
via email …..

Now that Congress is tormented with home mortgages after bailing out and practically owning Freddie Mac, Fanny Mae, AIG and numerous mortgage banks, perhaps Congress now is ready to consider my plan to invest Social Security funds in interest-bearing home mortgages, such as FHA or VA approved mortgages that the government has already investigated and guarantees.  This could cut some of the red tape for deserving home buyers involved in getting FHA approval and then having to borrow elsewhere from a private lending company.

While I previously compared this plan to Blue Cross handling Medicare, it now seems that Freddie Mac or Fanny Mae or AIG could be the logical agencies to administer it.

I have been hounding Congress with this plan for eight years.  Congress had refused to acknowledge this plan because they wanted to steal the Social Security money for their own pork projects.  Some Congressmen claim that Social Security funds are invested in government interest-bearing CD’s.
That would be like taking the funds out of one pocket and putting them in another pocket.  All Social Security money goes into the Federal General Fund along with other taxes.

Congress is to blame for the present financial fiasco because they forced lenders to make more mortgages to low-income people, then accepted bribes not to audit these financial agencies that had been covering up huge losses and huge bonus commissions paid for bad loans.

— REAL NEWS Editor



July 15, 2008 was the fourth time this was sent to REAL NEWS subscribers

Our Social Security taxes paid over a lifetime would be worth a small fortune if the government invested these funds safely in some kind of interest-bearing home mortgages, such as FHA or VA approved mortgages that the government has already investigated and guarantees.  This could cut some of the red tape for deserving buyers involved in getting FHA approval and then having to borrow elsewhere from a private lending company.  Municipal bonds also could be considered.

Social Security mortgages could be managed by a private Financial Agency similar to the way Blue Cross managed Medicare.  The Federal Reserve Banking System could also be considered to manage this.

The government investing Social Security funds in the stock market is not a good idea because of the great risks.  Good stocks can rapidly go bad.  Also, temptations would be too great to influence or fool the bureau’s stock buyers.

If taxpayers would be allowed to keep part of their own Social Security tax money to invest themselves, many might find at retirement age that they had accumulated little or nothing because their investment choices had fizzled, so their scaled-down Social Security pension would be their main income. The Government FHA type of investments is the safest way to go.

Money invested at just 6% compound interest would double every 12 years.  A worker’s Social Security accumulation would be worth several million dollars at age 67 retirement time.  The government would soon be able to cut Social Security tax rates because the FHA type loans would provide more than enough retirement money.

A 17-year-old person earning $15,000 this year will pay $1,147.50 Social Security tax this year and the employer will be taxed a matching $1,147.50, making a total Social Security tax payment for just this one year of $2,295, not counting any following year tax payments on earnings.

Using 6% compound interest, at age 29 that single year’s payment would double to $4,590, at age 41 it would double again to $9,180, at age 53 it would double again to $18,360, and finally at age 65 this single year’s payment would double again  to $36,720, which is 16 times the amount of the original one-year tax payment.

Over the next 49 working years, each yearly tax payment would multiply similarly, except the yearly earnings should greatly increase through inflation and added job experience.

The employee’s tax rate of 7.65% plus the employer’s 7.65% matching tax rate totals 15.3% of a worker’s pre-tax wages.  Does anyone deny that saving 15.3% should be much more than enough to provide a good retirement pension if this money is invested at compound interest.

The Budget Surplus that Congress had been bragging about came from the money Congress was borrowing from the unused Social Security and Retirement Funds.  The National Debt was still rising each year, according to the Department of Treasury Bureau of Public Debt.

Anyone responsible for collecting employee payroll deductions and paying these funds to the federal government can tell you that they make out only one check to cover all Income Tax, Social Security Tax, and Medicare Tax.

So this money all goes into the Federal General Fund, and there is no separate Social Security Trust Fund.

Tell your Congressman that if money is going to be available for future Social Security benefits, Congress must stop misappropriating these funds and safely invest this money at compound interest.

Your REAL NEWS editor has blanketed the internet and flooded the members of Congress many times with this save Social Security message over the past six years.  So far, no member of Congress has indicated that they have read or understood this message, although I got many replies from Congress members suggesting I should only contact my own senators or representatives.  Some acknowledged that they knew it was about Social Security and bragged about what they wanted to do for Social Security — which didn’t seem to accomplish anything as far as Congress
is concerned.

— REAL NEWS Editor

(Common sense, politically incorrect newsletter to 12,447 subscribers)

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