Appendix 9
Historical Update -- 01/12/2001.
The Curse of the Rock Report
Do you recall all the election talk about using the surplus to bolster Social Security? All though nothing has been done about it yet, I believe it's a foregone conclusion that it will happen sooner or later.
And when it does it will be yet another transfer of Income Tax Revenues into The Social Security system.
Appendix 11
Confirmation -- 10/13/2001.
The Curse of the Rock Report
I know from one on one discussions, that my view of Social Security is not agreeable to older people. The closer you are to retirement, the greater the likely hood that you will cling to the myth that you had (for many years) paid in to the system, and that money had been invested on your behalf and therefore you now reap the benefit of YOUR money.
My view as described in the Curse of the Rock Report is that you and I have done nothing more that pay a tax, and when we retire we go on welfare. There is no investment, there never has been. The Social Security Trust Fund is merely a mechanism to transfer income tax revenue into the Social Security system.
Your elected politician isn't going to describe it to you this way, and even the national media isn't likely to come out and say it, but every now and then I tune in on a few people who are getting close to the truth.
The following dialog transpired on the Fox News Network's Special Report with Brit Hume, Sept. 7th 2001, between Brit Hume (the host) and Jeff Birnbaum of Fortune magazine.
| Hume: | Help me out here, on a couple of things, let's see if we can, you and I or at least you can help me establish some reality about this. |
| Birnbaum: | Alright. |
| Hume: | When the Social Security tax revenues come in, paid by the pay-role taxes we all pay, and employers pay. |
| Birnbaum: | Right. |
| Hume: | That money if it is… is used primarily to fund current benefits. |
| Birnbaum: | Current benefits.[yes] |
| Hume: | If there's money left over, as there is now, a surplus, that money is… |
| Birnbaum: | Is purchased by the treasury, it is, it goes into the treasury, it becomes treasury bills, (i. e.) IOU,s. |
| Hume: | Bonds? |
| Birnbaum: | Bonds.[yes] |
| Hume: | And the Social Security trust fund gets the bonds. |
| Birnbaum: | That's right. |
| Hume: | And then the money is then spent on something… |
| Birnbaum: | Right, on, on primarily, for over thirty years, it was spent on other government programs. |
| Hume: | Right. |
| Birnbaum: | And over the past couple of years. Because there's been such a large overall government surplus that money was used to buy down publicly held debt. |
| Hume: | Other debt? Debt apart from Social Security debt. |
| Birnbaum: | And that… description… that is buying down publicly held debt, taking back some of the debt that's out there, reducing the trillions of dollars of government debt, that's the lock box |
What they have
just described is what I tried to describe in the report,
detailed in figure #7. 
You don't have to be a rocket
scientist to make the leap of logic concerning the source of
money when the bonds are redeemed. That is detailed in Figure
#8.
This is the strongest confirmation I have seen to date, so on one side I am happy, however… on the other side, I now have to impeach my own witness.
They are wrong when they talk about the surplus, only in this last year, Fiscal 2001 is there a real surplus, and not a very big one at that.
And, The debt has not been reduced, it keeps growing at a hefty pace. (are you still getting savings bonds at work?)
And , the notion the employers pay a Social Security tax is another well hidden myth, that I detail in The Texas Chain Saw Rock Report.
They are correct though when they talk about government held debt, and the public held debt. That ratio is growing on the government side. What will it mean when the government holds all the debt? I don't know, but it worries the shit out of me.
Rock
