-Caveat Lector- SURPLUS! WHAT SURPLUS? THERE IS NO SURPLUS By JOHN CRUDELE THERE is no federal budget surplus. I'll say it again. There is no budget surplus. Before you even get to the issue of whether the 'budget surplus' should be given back to taxpayers as the wishful Republicans suggest, or used to prop up Social Security, as the desperately-impeached President Clinton said in his State of the Union speech on Tuesday, there is a small issue that needs to be taken care of - there really is no budget surplus. Issue No. 2. There is no way people can be allowed to invest their Social Security money in the stock market. That's because the 'money' -- as in cash you, I or the government would turn over to a stockbroker -- also doesn't exist. All right, here I go again trying to explain how our elected officials in Washington are perpetrating a fraud by proclaiming that there is a budget surplus. Over the past year, the federal deficit -- which is money owed by our government -- rose from $5.486 trillion to $5.618 trillion. Those are government numbers right out of Barron's. That means the federal debt climbed by $132 billion. Which means the federal budget DEFICIT last year was $132 billion. There was no surplus of $70 billion, or any other amount, as Washington is claiming. When the economy weakens -- as it always does -- the true deficit numbers will increase. The surplus claim is wrong. It's a fraud. Washington is able to pretend there is a surplus because it has been raiding the Social Security trust fund, which, you have to understand, isn't a pile a cash sitting somewhere in the Treasury. It's really a pile of government IOUs (Treasury bills, really) Washington puts into Social Security in exchange for the cash it steals. And it is our cash that is being stolen. Anyone who pays into Social Security is really unwittingly buying IOUs from a government that might not be able to pay in decades to come. Right now the Social Security system is running a surplus because more money coming in than going out. It's demographics at work -- more employees than retirees. That pleasant situation, however, will not last long. But this surplus belongs to people like me and you, who'll need it to retire someday. So Washington shouldn't pretend that it belongs to the country and part of the budget. The president wants this non-existent 'budget surplus' pumped back into Social Security. What does that mean? Washington will steal $200 billion from Social Security (turning a real $132 billion deficit into a $70 billion surplus), so that it can proclaim a budget surplus, then it will return the excess money to Social Security from where it was stolen in the first place. Oddly, that's actually a preferable charade to what the Republicans suggest. At least under the president's plan the 'surplus' comes full circle and ends up back in Social Security. Under the Republican plan, you would give away the 'surplus' and the money will disappear from the Social Security circle all together. The president, however, is wrong in backing a plan to allow people -- in some form or another -- to invest their money in the stock market. But the endorsement is a shrewd maneuver by a president in trouble. Bill Clinton knew back in 1992 what voters cared about -- the economy and jobs. And it is the worst kept secret in American economic history that the only thing keeping this country's marvelous economy going is the stock market bubble. It's just like Japan's wonderful economy before the bubble burst a few years back. Americans -- like the Japanese -- feel rich because of the stock market. And even though companies are laying off workers faster than they were during the hard times of the early 1990s, Wall Street is keeping people content. I estimate that President Clinton has no better than a 50-50 chance of remaining in office. Those odds go down to 60-40 against his presidency once witnesses are called before the impeachment trial (some day I'll be able to tell you why.) The president can maintain his high rating if the stock market keeps the economy rolling along. But like any other Ponzi scheme, the Wall Street bubble can't continue unless fresh money keeps coming into the market. President Clinton's Social Security proposal would provide a lot of fresh money to keep the market going, which'll keep the economy perking, which will keep Clinton's rating high. It all works quite nicely -- except that the proposal to allow people to invest their Social Security money in the market is impossible to enact. Here's why. As I said, there is no cash in Social Security. So if I am allowed to, say, put $10,000 of my Social Security money into the stock market, where is the cash going to come from? Washington doesn't have the cash. And if it does raise cash that'll be put in the market, who is going to supply the cash to pay retirees? Plus, liquidating Social Security's bonds would send interest rates skyrocketing. And when the stock market crashes, the Social Security system will be in worse shape than even the pessimists are predicting. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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