The dangerous tie between Social Security and ObamaCare 2.0

President Obama released his proposal for a revived healthcare bill today.  The bill for this is $1 Trillion. It is even worse than the legislation proposed in the first version of ObamaCare that everyone thought was dead.  There is a lot to dislike but one item that I haven’t heard mentioned is the plan to steal from ObamaCare 2.0 in order to make Social Security appear solvent once again.

You see,  Social Security depends on CURRENT workers payroll withholding to cover the checks that current retirees receive every month.  However, this year, there are not enough people working to cover the checks that are being written every month.

Let me say this another way.  This is the year that Social Security is finally broke.  And the ObamaCare plan put forward yesterday plans to take money from this proposed new health care plan to cover the Social Security checks being sent to seniors every month.

I’m going to explain how they plan to do this but first we need to go back and take a quick look at why Social Security is not able to cover current checks despite all the payroll deductions withheld from your checks over the years.

1. The original idea was for Social Security payroll deductions to be held for future payment to the retirees who payed into the system.
2. Along the way politicians realized there were HUGE amounts of cash in the Social Security fund and decided they would be a good, cheap, source of funds for ever growing federal programs and expanded benefits.  So money was taken from Social Security and replaced with IOU’s from the federal government.
3. This eventually got so out of hand that Social Security turned into a Ponzi Scheme where the withholding from current worker’s deposits were being immediately used to cover the checks for retirees.  Any amounts left over were taken to be used for the current federal budget.
4. To make matters worse government accounting doesn’t count the money taken from Social Security as part of the deficit.  So all those wonderful balanced budgets they talk about during the 1990’s weren’t.
5. In 2010 worker payroll deductions, over 12% of wages earned,  will not be enough to cover the Social Security checks written. To keep the checks from bouncing the government will borrow from China, Japan and anyone else who will loan them money to cover the shortfall.

So, along comes ObamaCare 2.0.  As proposed, the President’s bill would require new healthcare taxes for the next three years.  However, none of these new health benefits would start to be paid until after these three years.  In other words, they collect the equivilent of premium payments for three years, but pay no benefits.

So, any guess what they plan to do with these hundreds of billions of dollars they intend to collect for three years?  Yes, they have a provision that says these funds can be ‘loaned’ to Social Security if necessary.  The current leaders of Congress and the President are addicted to spending and we all stand to be the losers.  Novemember can’t get here fast enough.

On a final note, you may remember that George Bush and the Republican congress at one time tried to reform Social Security by allowing younger workers to paritally opt out of Social Security and invest a portion of their mandatory withholding in their own personal accounts.  Democrates pulled out all stops to scare people about risky investments in the stockmarket.  Buy as you can see, the real motivation was that they didn’t want you keeping those dollars in your account; they needed to ‘borrow’ them to cover the checks of current retirees.  This is the definition of a Ponzi Scheme.  As explained on the U.S. Securities and Exchange Commissions website:

“A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors (retirees) from funds contributed by new investors (workers).”

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