Earlier in this series of articles I wrote a little bit about Social Security.  But, it kept haunting me that there is much more that needs to be revealed about this unbelievable con game. And so, I offer just a few additional facts about it and my observations of human financial behavior because of it.

For instance, recognize that President Kennedy and Sergeant Shriver were the first ones to misuse the Social Security account.  They used Social Security funds to start the Peace Corps.  This was not the first or last time our money has been taken from American citizens and given to foreign nations.

Here are some things every U.S. citizen should know and remember about Social Security and the changes that have been made.  Start with a short history lesson on Your Social Security Card just in case some of you didn’t know this.  It’s easy to check out, if you don’t believe it.  Be sure and show it to your family and friends.  They need to recognize and understand what has happened.

Social Security Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes.  Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.  What happened to this government promise?

Franklin Roosevelt introduced the Social Security (FICA) Program and it was signed into law in 1935, becoming operative in 1937. To make his idea more palatable to citizens he promised that participation in the program would be completely voluntary.  It is no longer voluntary. 

Promises, promises !

Participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program. In the double speak Federal Programs use they say, “The employee pays half of Social Security “contributions” and the employer pays the other half.”  This is utter nonsense!

In an interview with Jesus Huerta deSoto at the Mises Institute a few years ago deSoto said, “No matter what the law says about how employees and employers share the burden of contributing to the system, from an economic point of view, the worker pays the whole tax. Mises first developed this insight in Socialism, where he said social insurance contributions always come at the expense of wages.

You see, the Government doesn’t like to be confused by facts!

So, that is currently a total tax of 12.4% on the first $128,400 that you earn.  That’s a rather significant increase from the original promise, isn’t it?

Money the participants elected (?) to put into the Program would be deductible from their income for tax purposes each year.  Now it is no longer tax deductible.  Did you notice how governments change the meaning of words?  Participants do not elect to put into the program — they are required! 

The money the participants put into the independent ‘Trust Fund’ (?) rather than into the general operating fund, would only be used to fund the Social Security Retirement Program, and no other Government program.

Under President Johnson the money was moved to the General Fund and spent!

No one has ever written a check to Social Security.  All such “contributions” are made to the United States Treasury.  That money is spent.  Worthless “IOUs” are put into a file in a cave in West Virginia.  Essentially, they are saying “these IOUs will be repaid by future generations.”  Welcome to the USA, young folks!

Another of the broken promises is that the annuity payments to the retirees would never be taxed as income.  Now up to 85% of your Social Security can be taxed.

In the event you do not believe or understand the validity of the above truths then you can easily find them with very little effort.

Have you noticed the incremental pattern of these changes?  It reminds me of the “boiled frog” story.

Another established fact is that most Americans (and you are one of them) have been “led down the primrose path” toward putting money into “tax-qualified retirement plans” — 401-K plans, HR-10 or IRA plans — with the thought that such plans are a safe place to accumulate money for your retirement.

And you paid a CPA or your favorite “financial adviser” who insisted that you “put the maximum allowed” into these plans!

Do you believe in the Tooth Fairy, too?

In nations throughout the world, history has proven that funds in such retirement programs are the easiest place for politicians to steal.  Do a little homework!  Check out where Brazil got the money to build their capital city, Brasilia, in 1960.  (Hint: They confiscated reserves on pension funds).  Do I have to mention Argentina?

Consider this thought:  When government creates a problem for citizens (onerous taxation) and then turns around and grants you an exception to the problem they created (any tax-qualified plan), aren’t you just a little bit suspicious that your mind is being manipulated?

Have you ever read the IRS Code?  Do you know anyone who has?  I understand that the first nine pages describe “income.”

The next 2,600 pages are exceptions to the code. To understand what the IRS Code is really saying all you have to do is read two or three of the exceptions and you can easily see their real message:  We (the IRS) own everything you earn, and after our insatiable appetites are (temporarily) met, then you may keep what is left over!

And so, in my pondering, I keep asking myself, “How in the world is this stuff happening?  How did it all get started? What makes such irrational behavior possible?  Why is it that the above facts are commonly known by people who can read yet they still believe that tax-qualified savings plans (?) are the safest and most efficient place to accumulate funds for their retirement?

It’s unbelievable!  Do you have any answers regarding why such things are happening?

R. Nelson Nash

Nelson Nash is the discoverer and developer of The Infinite Banking Concept™ and the author of Becoming Your Own Banker. Nash remains a popular teacher and lecturer on the Infinite Banking Concept™ through dividend-paying whole life insurance.