The Social Security Ponzi scheme is running out of steam

You can’t say we didn’t warn you.

While most news accounts said Social Security will dip into its trust fund this year for the first time since 1982, The Hill’s Merrill Matthews points out that there is no trust fund, because the federal government has borrowed that money and spent it.

Matthews writes:

Historically, workers have paid in more than was needed to cover benefits, allowing the trust fund to grow to $2.9 trillion — at least on paper.  However, the federal government has borrowed the trust fund surplus to cover other government expenses, depositing interest-bearing IOUs in its place.

If Social Security must pay out more than it receives, which the trustees say will happen this year for the first time since 1982, the government cannot draw from other assets because it doesn’t have any.  Indeed, the federal government has to borrow hundreds of billions of dollars every year just to cover its current expenses.

Thus the government must borrow the money — or raise taxes — to redeem its IOUs so Social Security can pay benefits.

A certain prescient politician warned us in 1990 while standing in from of a sign reading “embezzlement”:

“It is time for Congress, I think, to take its hands — and I add the president in on that — off the Social Security surpluses. Stop hiding the horrible truth of the fiscal irresponsibility that we have talked about here the past two weeks. It is time to return those dollars to the hands of those who earned them — the Social Security beneficiaries and future beneficiaries. … I think that is a very good illustration of what I was talking about, embezzlement, thievery.”

That was Harry Reid. The same Nevada senator who years later said, “Unfortunately, despite decades of success, many Republicans continue to threaten the future of Social Security. Republican leaders routinely exaggerate the financial challenges facing the program in an effort to create a false sense of crisis. … I have spent my career fending off attacks against Social Security.”

Actually, Social Security is and always has been a Ponzi scheme, depending on future “investors” to pay off the original “investors.” That worked so long as there were 40 workers for every retiree, but does not work so well when the ratio of workers to retirees nears two-to-one.

Embezzlement?

 

 

 

Newspaper column: Now Democrats find fault with visa program that Reid abused

Democrats are highly selective about the things that send them into high dudgeon.

Democratic California Sen. Dianne Feinstein said this past week that Congress should end the EB-5 visa program that grants visas to foreigners who invest at least $500,000 in job-creating projects in the U.S., calling it a “citizenship-for-sale” program.

Her umbrage was prompted by reports that President Trump’s son-in-law Jared Kushner’s sister mentioned the visa program to potential Chinese investors in a family-owned project.

Where was the outrage four years ago when Nevada Sen. Harry Reid twisted arms at Immigration and Customs Enforcement to reverse a decision that was blocking EB-5 visas for Chinese investors in a Las Vegas casino with ties to Reid’s son Rory?

An ethics complaint was filed against Reid, then Senate Democratic majority leader, but it was buried in the bureaucracy.

The SLS built with foreign investment money (USA Today pix)

In fact, four days after that complaint was filed, the Senate voted to confirm the nomination of Alejandro Mayorkas to become the second in command at the Department of Homeland Security. Mayorkas was the one who granted the visas after personally talking to Reid. The vote was 54-41. Had Reid not just nuked the Senate filibuster rules the nomination would have failed to achieve the previously required 60 votes.

Mayorkas was confirmed despite the fact he was under investigation at the time for expediting visa applications for certain applicants despite the rejection of those visas by career staffers.

Reid had made a personal call to Mayorkas in January 2013, according to the Washington Times, and Mayorkas promised him his agency would take a “fresh look” at the SLS hotel and casino visa request. Soon after that the agency expedited visas for about two dozen foreign SLS casino, formerly the Sahara, investors. The Times reported that Federal Election Commission records show executives for two companies involved in the hotel project had made $127,000 in political donations over the previous three elections, mostly to Democrats.

The ethics complaint by Cause of Action said, “Despite the fact that these applications were ineligible for appeal, Senator Reid’s efforts to lobby USCIS (U.S. Citizenship and Immigration Services) resulted in the reconsideration and approval of those applications … Even more troublesome is the fact that Senator Reid’s son, Rory Reid, and his law firm, Lionel, Sawyer & Collins P.C., are legal counsel to the SLS Hotel and Casino.”

The U.S. Senate Code of Official Conduct says: “The decision to provide assistance to petitioners may not be made on the basis of contributions or services, or promises of contributions or services, to the Member’s political campaigns or to other organizations in which the Member has a political, personal, or financial interest.”

Homeland’s Inspector General issued a report in March 2015 accusing Mayorkas of showing favoritism and providing special access to EB-5 visas for Democrats —  specifically Harry Reid, Terry McAuliffe and Anthony Rodham, brother of Hillary Rodham Clinton.

Instead of attacking, as Democrats are doing with Trump’s kin, the Obama administration circled the wagons. Homeland Security Secretary Jeh Johnson said Mayorkas had been “impatient with our sluggish government bureaucracy.” It wasn’t sluggish. The expedited visas were denied and that decision was, according to agency rules, not appealable.

Later an ICE agent who tried to block the SLS visas was fired. She refused to accept a $100,000 severance package that would have required non-disclosure and testified before Congress about the abuses of the EB-5 program. She later accepted an undisclosed settlement.

The agent testified that EB-5 visas were approved in as little as 16 days and “lacked basic necessary law enforcement” screening.

She told Congress: “In 2013, after disclosing gross mismanagement, waste and fraud that threatened the general public’s safety, National Security Risks and public corruption surrounding an EB-5 project, I was subjected to a significant amount of harassment and retaliation. … Some of the violations I was investigating surrounding this EB-5 project include Title 18 statues; Major Fraud, Money Laundering, Bank and Wire fraud. In addition, I had discovered ties to Organized crime and high ranking officials and politicians, who received large campaign contributions that appeared to have facilitat(ed) the EB-5 project.”

Back then nothing could be heard from Democrats over the chirping of crickets, but now Feinstein ruminates that it is “crystal clear that the EB-5 regional center program presents a stark conflict of interest for the Trump White House.”

Reid got a pass and a coverup, but Trump is not a fellow Democrat.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Look at who is now saying elections could be rigged

Reid campaigning with Clinton in Las Vegas this month. (NYTimes photo)

When Donald Trump says the elections are rigged, he is paranoid.

When Harry Reid writes a letter to the head of the FBI asking for an investigation into whether Russians are trying to rig the election for Trump, he is prescient. Nay, really just late out of the gate.

Reid’s Aug. 27 letter to FBI Director James Comey seeking the probe comes more than a week after the FBI sent out a warning to state elections departments about possible cyber attacks.

Yahoo News reports:

The FBI has uncovered evidence that foreign hackers penetrated two state election databases in recent weeks, prompting the bureau to warn election officials across the country to take new steps to enhance the security of their computer systems, according to federal and state law enforcement officials.

The FBI warning, contained in a “flash” alert from the FBI’s Cyber Division, a copy of which was obtained by Yahoo News, comes amid heightened concerns among U.S. intelligence officials about the possibility of cyberintrusions, potentially by Russian state-sponsored hackers, aimed at disrupting the November elections.

Yahoo News sources said the targeted states were Arizona and Illinois. In July, Illinois shut down voter registration for 10 days after hackers downloaded data about 200,000 voters.

The FBI alert listed IP addresses, one of which has been linked to suspected Russian hackers.

Reid’s letter asks:

Reid FBI letter

ABC News posted a news analysis by Richard Clarke, a former White House senior cybersecurity policy adviser, on Aug. 19 that concludes:

If someone makes the charge after this election that the results were altered by hackers, our country has almost no way of credibly refuting that claim. Thus American voters will have no way to know if they can trust the results of the election, unless it is a landslide, so large that it seems unlikely that the winning margin was purely the result of malicious activity.

How to fix the Social Security debacle

I kept thinking this week as Washington bureaucrats celebrated the 80th birthday of Social Security that I should point out how the whole thing is a big Ponzi scheme, as I did in 2009. Eighty years ago every retiree was supported by 40 workers, but soon that ratio will be 2 to 1.

Sen. Harry Reid says Social Security is just fine, though in 1980 he said the trust fund was being embezzled.

Stephen Moore beat me to it with today’s op-ed in Investor’s Business Daily. “From the moment Franklin Roosevelt created Social Security in 1935, the system was set up as a classic Ponzi scheme,” he writes, citing the worker to retiree ratios.

Moore not only points out the problem, but he offers a fix:

There are options to fix the program, but they’re all very bad for today’s and tomorrow’s workers. Democrats want to raise the tax — and take even more money from workers’ paychecks. Republicans, like New Jersey Gov. Chris Christie, want to cut benefits. Anyway you cut it, young workers will be asked to pay more in and get less out.

Another fix that would forever end the Ponzi scheme and provide today’s young workers with higher, not lower benefits. Give them the option of putting 10% of their 12.6% payroll tax dollars into an individual account that’s invested in an index fund of all stocks.

At historic rates of return, this would give workers a 7% return per year, which would let them retire as millionaires after 40 years of work. They’d receive two to three times more than Social Security promises.

Social Security could still be there as a backstop for those who didn’t reach a minimum benefit, and the feds could issue long-term bonds to pay existing retirees their promised benefits.

 

IBD chart

One-note Harry is getting downright monotonous

Fire behind Red Rock visitor center. (R-J photo

Fire behind Red Rock visitor center. (R-J photo

Got a problem? Harry’s got a scapegoat.

Bad breath? Blame climate change.

Flooding? Global warming.

Drought? Climate change.

Wildfires? You guessed it.

“The West is burning,” Harry Reid told reporters, according to a Review-Journal account. “I could be wrong, but I don’t think we’ve ever had a fire in the Spring Mountains, Charleston range like we just had.

“Why are we having them? Because we have climate change. Things are different. The forests are drier, the winters are shorter, and we have these terrible fires all over the West. … We have climate change. It’s here. You can’t deny it. Why do you think we are having all these fires?”

Reid, Nevada’s senior senator, was talking about the nearly 30,000-acre Carpenter 1 Fire that swept through the Spring Mountains from Trout Canyon to Kyle Canyon, threatening dozens of homes and costing $17 million to fight.

That, according to a Las Vegas Sun account, is almost equal to the state forestry division’s annual fire prevention budget, which is federally funded. The paper said the budget is being cut from $19 million this past year to $7 million this next fiscal year.

Pay no attention to any of that. Blame it on climate change.

Nor pay any heed to the fact that in 1968 the Interior and Agriculture departments ended the decades long practice of prescribed burns to reduce the underbrush and other flammable contributors to fires or that since then the annual acreage burned in wildfires has grown exponentially.

Before 1980, less than 25,000 acres of Nevada burned in wildfires each year. The acreage has now increased to more than 600,000 acres each year.

But pay no attention to the fact there has been no appreciable global warming in 15 years.

Also, pay no heed to the fact that all the “green” energy backers are huge contributors to Harry Reid. That is merely coincidence.

While Harry was blaming every sniffle experienced by those living near the Reid Gardner coal-fired power plant on pollution from the burning coal, it made no difference that the smokestacks met all state and federal clean air standards and the real pollution was from blowing dust.

Harry managed to get the state Legislature to shut it down early and make the ratepayers pick up the tab.

Unions awake to reality of ObamaCare and its perverse incentives

Though the White House has steadfastly claimed ObamaCare will be good for the economy — slowing annual health care inflation by 1.5 percentage points and increasing GDP — some of the nation’s biggest backers of the law are finally awakened to the harsh reality.

In a letter addressed to Harry Reid and Nancy Pelosi, three big union bosses, including longtime Las Vegas Culinary union head D. Taylor, warn that ObamaCare must be fixed before it taxes their hard-won Cadillac nonprofit health insurance plans into bankruptcy and destroys the 40-hour workweek.

The letter reminds, in no uncertain terms, how much Democrats like Harry Reid owe the union.

Harry Reid and D. Taylor in happier times. (Sun photo)

Harry Reid and D. Taylor in happier times. (Sun photo)

“We have been strong supporters of the notion that all Americans should have access to quality, affordable health care,” the union bosses write. “We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.”

In 2010, that huge union surge completely changed in Nevada the turnout ratio that was the rule across the rest of the nation.

The unions now realize that the law creates “perverse incentives” for employers to keep employees’ work hours below 30 hours a week so they do not have to provide health insurance. “Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits,” the letter points out.

But perhaps more importantly, the unions’ nonprofit plans will not qualify for ObamaCare subsidies though union members will be taxed to subsidize others, making “plans like ours unsustainable.”

“Time is running out,” the bosses warn, “Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe.”

Perhaps they should have been paying attention in 2010 when the Heritage Foundation warned that ObamaCare would increase the deficit by an average $75 billion per year and result in an estimated 670,000 lost job opportunities per year.

Maybe someone at the unions took a closer look at the June jobs report in which the unemployment rate held steady at 7.6 percent, but the underemployment rate rose from 13.8 percent to 14.3 percent. This is because there are more people working part-time who want to work full-time.

Joe Heck says House will not take up Senate’s ‘comprehensive’ immigration bill

While the Las Vegas news media were gathered at the Culinary Union headquarters to hear Sen. Harry Reid criticize opponents of the Senate-passed immigration reform bill and listen to people chant, “Sí, se puede,” Congressman Joe Heck was at the Nevada Republican Men’s Club saying the 1,198-page pork larded bill will not be taken up by the House.

He said he expects House Speaker John Boehner, a Republican, to bring up aspects of immigration reform one piece at a time and not in a “comprehensive” bill.

Joe Heck

Heck pointed out the absurdity of the bill’s contention that a pathway to citizenship for illegal immigrants may not begin until the Southern border is 90 percent secure, meaning 90 percent of those trying to illegally cross the border are caught. If a certain unknown number escape capture or detection, how can you ever make such a calculation? he asked.

But to Republican Heck the biggest stumbling block is the language in the bill that reads: “The Secretary shall permit registered provisional immigrants to apply for an adjustment to lawful permanent resident status if (list of exceptions) … 10 years have elapsed since the date of the enactment of this Act.”

In order words, amnesty starts in 10 years whether the boots a single new border guard are on the ground or whether a single foot of border fence has been built.

The congressman began his talk about immigration with a line similar to his online discussion of the issue: “As the grandson of Italian immigrants, I welcome the debate on immigration reform and the opportunity to find real solutions for our broken immigration system.”

He goes on to say:

“First and foremost, we must improve border enforcement. This includes not simply securing our northern and southern borders, but securing all points of entry to the country and eliminating visa overstays.

“Next, we must eliminate incentives for individuals to want to come here without following the legal pathway. The most obvious incentive is the chance to find employment, so a modern e-verify system must be put in place to ensure businesses are hiring only those legally permitted to hold a job and protect against worker exploitation.”

In his speech, as online, Heck said the real broken part of the law is not illegal immigration but legal immigration, which has become paralyzed with the bureaucratic roadblocks of processing visa requests. It should not take years for someone to go through the process, he said.

He said he flatly opposes blanket amnesty, though he is open to proposals that address earned citizenship, but it must not penalize those already waiting in line.

By the way, four of the six officers of the Nevada Republican Men’s Club are women.